Keshav Ltd. sold the goods to Madhav Ltd. on 30 days credit policy. Madhav Ltd. paid the dues after 90 days but interest was paid after a year. What is the treatment for interest received under GST law?
Interest or late fee or penalty for delayed payment of any consideration for any supply is included in the value of supply. But the time of supply for such interest is attracted when such interest is received.
At the time of receipt of such interest, the supplier has to issue the debit note as per section 34 of CGST Act/ State GST Act.