GST on payments depends on whether they are consideration for agreeing to tolerate, refrain from, or perform an act. GST applies to payments only when there is an express or implied contractual agreement creating a nexus between the payment and an agreed obligation to refrain from, tolerate, or do an act; mere monetary flows arising from breach, statutory cancellation or fines that compensate loss or deter wrongdoing are not consideration for a supply and are not taxable, whereas payments serving as consideration for independent or ancillary agreements to tolerate, refrain or perform are supplies taxable according to the principal supply's treatment.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
GST on payments depends on whether they are consideration for agreeing to tolerate, refrain from, or perform an act.
GST applies to payments only when there is an express or implied contractual agreement creating a nexus between the payment and an agreed obligation to refrain from, tolerate, or do an act; mere monetary flows arising from breach, statutory cancellation or fines that compensate loss or deter wrongdoing are not consideration for a supply and are not taxable, whereas payments serving as consideration for independent or ancillary agreements to tolerate, refrain or perform are supplies taxable according to the principal supply's treatment.
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