Decree-holders not liable to pay GST on part payments of interest under arbitral awards; prior payment orders quashed

HC held decree-holders are not liable to pay GST on part payments of interest under an arbitral award. The court quashed and set aside the order directing the judgment-debtor to make such GST payments, endorsing the view of the Advance Ruling Authority that GST on those interest payments is not payable. The impugned orders were therefore quashed and the petition disposed of.

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Issues: Whether GST is payable on interest and costs awarded under arbitration and whether execution court orders directing payment of GST on part payment of interest should be quashed.

Analysis: The Court considered the ruling of the Authority for Advance Ruling which held that GST is not leviable on interest awarded under arbitration and on costs awarded under arbitration in respect of the awards subject of the execution proceedings. The executing court had directed payment of GST on part payment of interest; that direction was examined in light of the Advance Ruling placed on record and the limited scope of the petitions confined to the question of payment of GST on part interest payments.

Conclusion: The impugned execution orders directing payment of GST on the specified arbitration interest and costs are quashed and set aside because GST is not payable on those amounts as held by the Authority for Advance Ruling.

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