GST on interest for late payment of Invoice value

[Ashish Diwedi]

We are registered under GST and are supplying taxable goods as well as exempt goods to our customers. In case of non payment of Invoice value in time, we charge interest to the customers. What shall be the GST implication in case of (i) Taxable goods & (ii) Exempt Goods.
If GST is applicable, what shall be the rate of GST for interest amount collected? Will it be 18% of the rate or the rate of GST as applicable to goods?

AI Summary

GST on Late Payment Interest Matches Goods' Rate; Nil for Exempt Goods Per Section 15. Debit Note Consideration Discussed. A forum participant inquired about the GST implications on interest charged for late payment of invoice values for both taxable and exempt goods. Four responses were provided. It was clarified that the GST rate on interest should match the rate applicable to the goods involved, as interest is considered an addition to the value of supply under section 15. For exempt goods, where the GST rate is nil, the interest collected would also attract a nil GST rate. The discussion also touched on whether a debit note should be issued in such scenarios.