Question Summary:
Sometimes I have to pay fines on utlility bills if I pay them after due date, is it fall in category of INTEREST?

Question Detail:

Sometimes I have to pay fines on utlility bills if I pay them after due date, is it fall in category of INTEREST?

Answer :

In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh
The contemporary jurists have stated that it is permissible for one to enter into municipal/local council contracts on condition that one pays one’s utility bills on the payment due date. One should avoid situations where one is forced to pay monetary fines for late payment as that constitutes interest which is forbidden and impermissible.
 
And Allah Ta’āla Knows Best
 
Ismail Desai,
Darul Iftaa
 
Checked and Approved,
Mufti Ebrahim Desai.