No GST on penal charges levied by banks, NBFCs and other regulated entities on loans, clarifies CBIC

No GST on penal charges: The government has clarified that no bank, NBFC, regulated entities (REs) can charge Goods and Services Tax (GST) on penal charges on loans. Penal charges are payments in the nature of liquidated damages for breach of contract and hence are not a consideration for tolerating an act or situation.

from Tax-Wealth-Economic Times https://ift.tt/p5Jkq2a