Example: - 21

Mr. A supplied goods to Mr. B for Rs 4,50,000 on 28.07.2017. The contract provides for credit period for 30 days, if payment is not made within 30 days then interest will be charged @15% on payment beyond this period.  Payment made on 27.09.2017. Calculate transaction value in this case.

Ans. Section 15(2)(d) provides that interest, late fees and any  penalty for late payment will form part of consideration and GST will be payable. In the above example interest works out on Rs. 450000*15/100*1/12  i.e  Rs. 5625. It appears that earlier invoice will be issued for 450000 but as per contract specified interest will be charged there on being delay in payment, thus an amount equivalent to interest charged would be added to the  transaction value raising the taxable value to Rs. 455625.

According to Sec 34, where a tax invoice has been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to be less than the taxable value or tax payable in respect of such supply, the registered person, who has supplied such goods or services or both, shall issue to the recipient a debit note containing such particulars as may be prescribed. Accordingly, supplier would issue a debit note to the buyer in this case for Rs. 5625 + tax as applicable..