No GST on penalties, late fees/penal interest and fines leived by RBI: AAR Maharashtra

 

The Authority for Advance Rulings (AAR), Maharashtra in the case of M/S. RESERVE BANK OF INDIA vide Order No. GST-ARA-117 of 2022-23/2024-25/B-53 dated 31.07.2024, has ruled that penalties, late fees, penal interest, and fines levied by RBI for both contravention of laws and breach of contractual agreements are not subject to GST. This decision aligns with the clarifications provided in the CBIC Circular No. 178/10/2022-GST, ensuring that such payments are not considered as consideration for any supply.

The authority concluded that penalties levied by RBI for contravention or violation of laws do not constitute a supply of service under GST. Therefore, No GST is applicable on penalties, late fees, and fines levied and collected by RBI for contravention or violation of provisions of law.

Further, the penalty of the nature for non-performance or under-performance as per contractual agreement by RBI with third party vendors are also not taxable under GST.

 

GST ARA Order In Case Of Reserve Bank Of India

From,
Krishnkant Jakhotia
Mobile No. :- 9422507911
Email Id :-  taxtalknew@gmail.com