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2019 (8) TMI 1285 - AAR - GSTLevy of GST - amount received on or after 01.07.2017 towards interest, late fee penalty relating to the services other than continuous supply of services(CSS) rendered by the applicant before 01.07.2017 - agreeing to tolerate an act - Pre-GST regime - HELD THAT:- The question relates to the services rendered by the applicant in Pre-GST regime, i.e., during service tax regime of taxation. We find that the applicant leases/ rents the port space and collects lease rentals. The applicant as per the license/ rent agreement/ contracts collect lease rental charges and in cases of belated payment/ default, late-fee/ penal interest as stipulated in the contracts are collected by them, for which a separate invoice (RCA) is raised. It is stated that the invoices have been raised during the service tax regime and service tax paid but the applicant has received interest, late fee, penalty in the current period, i.e., under GST regime of taxation as the consideration was received belatedly. The provisions of Section 13 of CGST and TNGST Act come into effect from 1st July 2017. From 1st July 2017 onwards, the liability to pay GST on supply of services is determined by the time of supply in Section 13 - In the instant case, the applicant has collected an amount as interest/ late fee/ penalty for the delayed payment of consideration for the original service. This amount was received after 1st July 2017 and separate invoices Rent Claim Advance (RCA) Receipt are raised by the applicant. There is a payment of a separate consideration for this tolerance of delayed payment of lease / rent. This payment is a part of the contract for supply of services of the applicant to the port user in the course of their business. It can be said that as the applicant has tolerated the delayed payment of consideration of lease/ rent which the recipients should have paid much before. Therefore, this tolerance on the part of the applicant for the delayed payment of lease/ rent by collecting an interest/ late fee / penalty is a separate supply of service as covered under Section 7 (1) (a) of the Acts. The service namely agreeing to tolerate an act, is squarely covered under the classification scheme of the services. Further, the consideration for this was received and the invoice (RCA) raised both only after 1st July 2017. Accordingly, the time of supply for this supply will be determined by Section 13(2) depending on the facts in each case. In any case, it would be after 1st July 2017 and hence, this supply is liable to GST.
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