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GST Rate and HSN Code on Payment Delay Charges.

suresh (senior accountant) (23 Points)

05 September 2017

Is there GST applicable on Payment Delay Charges if yes what is the rate and HSN Code.
Kindly help me .
Thanks.

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10 Replies

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 05 September 2017

Payment delay means What...?
If you mean GST late payment interest is applicable...
If you mean Customer delay the payment. It's not under GST. It's only business transaction purpose...

1 Like

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S ELAVARASI (ACCOUNTANT) (2975 Points)
Replied 05 September 2017

Yes. I agrred to RAJA P M.,

The delayed payment related interests are business related agreement. So, It's not reflected in GST.

1 Like

suresh (senior accountant) (23 Points)
Replied 06 September 2017

I mean Customer delay Payment
ok thanks sir
thanks a lot

Sohail Khan (23 Points)
Replied 15 January 2018

Sir,

As per Section 15 (2) (d) of CGST Act, 2017 " the value of supply shall include interest or late fee or penalty for delayed payment of any consideration for any supply." Therefore any interest collected on late payment received towards sales is liable to GST

Deepankar Khurana (2 Points)
Replied 15 January 2018

Dear Sir,

Please tell the tax rate of GST along with HSN Code for GST charged on account of Late payment by customer.

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Ravindra Thale (Accountant) (22 Points)
Replied 14 March 2018

PLS TELL ME HSN CODE OR SAC CODE ,IF ANY,FOR DELAY PAYMENT CHARGES CHARGES TO MY CUSTOMER ON LATE PAYMENT.

TEJAS ASHOK DHOBALE (ACCOUNTANT) (22 Points)
Replied 27 April 2018

Dear Sir / Madam,

please reply on below question :

1. Sir, As per Section 15 (2) (d) of CGST Act, 2017 " the value of supply shall include interest or late fee or penalty for delayed payment of any consideration for any supply." Therefore any interest collected on late payment received towards sales is liable to GST

Read more at: https://www.caclubindia.com/forum/details.asp?mod_id=422693#reply

Sohail Khan (23 Points)
Replied 10 July 2018

The HSN Code will be the same as the item HSN code Just mention in the descripttion as interest on late payment /overdue charges. And the GST Rate will be the same as the item rate because interest is earned from the consideration of that item.

Ritik Chopra (student) (8128 Points)
Replied 16 April 2021

So keeping in view the above section, the HSN Code and GST for the delayed payment would be sameas the item HSN code. You will be required to show it separately in the bill as delayed payment.