Question ID :
44797
HSN OR SAC CODE
I, wanted to know that regarding applicability of HSN or SAC Code under GST on the transactions regarding Interest received on late payment by buyer. As section-15(2)(d) of CGST Act, says the value of supply also includes interest, penalty, and late fees for delayed payment of any consideration for the supply of goods or services or both. The same will be taxable at the rate at which such goods or services were taxable. In short, the classification of interest cannot be different from the classification of such goods or services.
Please help in determining HSN or SAC Code as well as How to reflect it in GSTR-1 (Table-12 HSN Summary of Outward supplies with UQC)
Posted by
CA. SHAH AMIT ANIL HANSA
on
Feb 14, 2025
Filed Under
INDIRECT TAXES
Under GST, interest received on late payment by the buyer is considered part of the value of supply as per Section 15(2)(d) of the CGST Act, 2017. This means it will be taxed at the same rate as the underlying supply (goods or services).
HSN/SAC Code for Interest on Late Payment:
For Supply of Goods:
The HSN Code of the underlying goods will apply.
The interest will be added to the taxable value of the same HSN in GSTR-1.
For Supply of Services:
If the late payment relates to a service, then the SAC code of that service should be used.
If it's a general interest charge on overdue payments (not tied to specific goods/services), then SAC 9971 (Financial Services) can be used.
Posted by
SACHIN KUMAR RAI on
Feb 28, 2025
Answer ID :
85797
For the interest collected on delay in payment of consideration
for the supply of goods or supply of servias, the HSN orSAC code as recorded in the invoice issued earlier for the transaction value shall apply for interest as well.
Posted by
SREENIVASULU THULASIRAM on
Apr 13, 2025