GST collected on late fee by Electricity board

[Ravikumar Doddi]

Dear sir,

Applicant is a manufacturer supplies goods to electricity board under a tender, usually they collect late fee/ penalty even in VAT regime and now under GST regime receipt of goods after specified date, will GST paid on such late fee/penalty is claimable by the applicant or not. Thanks in advance

AI Summary

GST on Late Fees for Delayed Delivery Non-Claimable; Input Tax Credit Not Admissible Under Section 15(2)(d) CGST Act An individual inquired whether GST paid on late fees or penalties charged by an electricity board for delayed goods delivery is claimable. A respondent clarified that under Section 15(2)(d) of the CGST Act, GST on such fees becomes part of the transaction value and cannot be claimed by the supplier. The inquirer further questioned if GST input is available when the recipient charges late fees. The respondent explained that the electricity board provides a service by tolerating the delay, and proving its use in business is challenging, thus input tax credit (ITC) is not admissible.