ISSUE:
Whether the company is liable to pay Goods and Services Tax (GST) on the penal Charges that it recovers from its borrowers for late payment of EMIs?
RULE:
The rule in Re: Bajaj Finance Ltd., 2019 is still being determined by the Supreme Court of India. However, there have been conflicting rulings from different courts and tribunals on the issue of whether GST is payable on penal charges recovered from borrowers for late payment of EMIs.