CBIC clarifies GST on notice period payments cheque dishonour and other fees businesses cite daily

Why payments like non compete and utility charges may count

CBIC has issued a circular explaining how GST applies to payments received for tolerating an act, including amounts tied to notice period non compliance, non compete fees, utility late payment charges, and cancellation charges by sectors like railways and airlines. The clarification also addresses scenarios such as cheque dishonour, aiming to reduce disputes over whether such collections fall under GSTable transactions.