Please clarify if GST is applicable on penalty amount charged by PSU from their Dealers for violating Market Discipline Guidelines (MDG) of the PSU.
- If yes, under which section of GST Act 2017?
- What will be the SAC CODE for that?
- Can a PSU be classified as "Central.Government" for this purpose? If yes, why and on what basis?
This is incorrect. Section 15(2)(d) says - "Interest/ Late Fee/ Penalty arising out of a delayed payment" - qualifies for GST. However, initial question was "Is GST supposed to be charged on penal charges imposed by PSU for violating guidelines?".. Violation of guidelines is not an "delayed payment" case. hence, GST shouldn't be charged on this..
Short answer is yes.
As per section 15(2)(d) of CGST Act, 2017 penalty, interest or any other amount related to supply has to be included in value of supply.
You can use SAC of services others or your normal HSN for products.
PSU is not central government for this purpose.
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