Interest on Deferred Payments in Road Projects Taxable Under GST: Maharashtra AAR

In re Shenwa Infrastructure Private Limited (GST AAR Maharashtra) In a ruling that provides critical clarity for infrastructure companies, the Maharashtra Authority for Advance Ruling (AAR) has held that the interest component received on deferred payments under the Hybrid Annuity Model (HAM) is liable for Goods and Services Tax (GST). The authority concluded that such interest is part of the total consideration for the construction services provided and must be taxed at the same rate as the principal supply. The decision, in the case of In re Shenwa Infrastructure Private Limited, aligns with...