Order Date: 30 May 2022

Facts:

• The applicant, M/s. Andhra Pradesh Industrial Infrastructure Corporation Limited, allots the land to the SC/ST/BC entrepreneurs duly collecting certain percentage of the land cost from the entrepreneurs at the time of allotment of land and the sale agreement for the same will be executed on satisfaction of certain allotment conditions by the entrepreneur. 

Issue:

• Whether the interest amount receivable on the annual instalments fixed by the applicant is liable to GST or not?

Order:

• The Authorities observed that the APIIC had given a facility to the beneficiaries, by extending the service of fixation of annual instalments with an interest @16% p.a for delayed payment of 75% of total consideration over a period of time, In such a case, the interest on the credit facility allowed by the applicant is part of the value of taxable supply of service categorized under “agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act;”
• Accordingly, the interest amount receivable on the annual instalments fixed by the applicant is liable to GST.