GST Rate on Interest Component: AAR Confirms Interest Follows Classification of Road Works Contract,...

The AAR has confirmed that the "GST rate on the interest component" "follows the classification of the road works contract," and it will be taxed at the "same rate as the principal supply." The ruling is a significant step towards a more transparent and less intrusive tax environment, is aimed at simplifying the tax structure and reducing the tax burden on essential goods. The move is expected to have a significant impact on various sectors. The ruling clarifies that a tax authority can't add a tax to a company's account without a valid reason.