Articles 28th May 2021
Determination of value is a crucial factor in the judicious levying of indirect taxes. One such aspect is interest/penalty/late fee for delayed payment of consideration for any supply which has to be specifically included in the value of supply of goods or service under the GST laws. Economic Laws practice’s Jignesh Ghelani, Partner and Palak Shah, Senior Associate in their article with Taxsutra shed light on the ruling of the Gujarat AAR which held that the applicant is liable to pay GST on reverse charge basis on the amount paid as interest on late payment of invoices of imported goods. The authors also discuss how the mentioned ruling has opened a pandora’s box with a host of issues, questions and tax implications.
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