TaxTMI 
TaxTMI 
XYZ Pvt. Ltd. Is recovering Interest from employees towards personal loan given to them. Is XYZ required to pay GST on the interest received?
Interest recovered from employees on loan given
28 Dec 2021 
11 Replies 
5074 Views Asked by
GST exemption on interest for loans applies broadly, but credit card interest and penal/late payment interest are taxable.
Extending deposits, loans or advances where the consideration is represented by interest or discount is subject to a nil rate under Notification No. 12/2017 CT (Rate) and similarly under IGST; however, interest involved in credit card services and interest charged for delayed payment (penal/late payment interest) are excluded from that exemption and treated as taxable. (AI Summary)
Extending deposits, loans or advances where the consideration is represented by interest or discount is subject to a nil rate under Notification No. 12/2017 CT (Rate) and similarly under IGST; however, interest involved in credit card services and interest charged for delayed payment (penal/late payment interest) are excluded from that exemption and treated as taxable. (AI Summary)