This was the order in the case of SPFL Securities Ltd. 2021.

Let us have a short overview.

Applicant was engaged primarily in business of providing services of stock broking i.e. purchasing and selling of shares on behalf of clients on exchange platform by virtue of being a recognized BSE/NSE appointed stock broker.

 It filed an application for advance ruling to determine taxability on delayed payments charges on reimbursement of amount by client to applicant, where client failed to pay amount paid to Stock Exchanges for purchase of securities.

The Authority for Advance Ruling observed that delayed payment charges are squarely get covered under GST for purpose of taxation.

Since, the applicant is regularly providing services of ‘trading of securities on behalf of customers’ which is a supply of service on which the applicant is admittedly paying GST.

Delayed payment charges are also linked to the above services of ‘Trading of securities on behalf of customers’ and GST on the same shall be payable in view of section 15(2)(d) of CGST Act, 2017.

Therefore, it was held that Applicant would be liable to pay GST on the delayed payment of charges which are overdue from the client towards trading of securities and reimbursed to them.