Case Law Details
In re Pink City Steel Rolling Mills Pvt Ltd (GST AAR Rajasthan)
In a recent ruling by the Advance Ruling Authority in the case of M/S Pink City Steel Rolling Mills Pvt Ltd., the issue of GST applicability on delayed payment of interest was addressed. The applicant, a registered taxpayer under the Goods and Services Tax (GST) regime, had raised three significant questions related to the timing and procedure of GST payment on interest for delayed payment of consideration.
1. When is GST to be Paid on Delayed Payment of Interest?
The first question revolved around the stage at which GST is to be paid on delayed payment of interest by the purchaser of goods. According to Section 12(6) of the GST Act, the liability to pay tax arises on the date when the supplier of goods receives the additional value through interest on delayed payment of any consideration. This implies that GST is to be paid at the time when the supplier actually receives the interest amount.
2. Issuance of Fresh Invoice for Delayed Payment Interest:
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