GST on Uncertain Revenue

[CAPurnima Bothra]

Case Study:

Lessor has raised demand note asking lease rental for the whole year.However lessee has moved to court and is not ready to pay any dues.Now in this scenario Lessor is paying GST out of his pocket as no amount is recoverable from the lessee which leading to huge cash blockage at this moment.

Can GST amount be escaped/defered on uncertain revenue and be paid once the revenue becomes certain.

AI Summary

Time of supply of services determines GST liability: invoice date or receipt of payment triggers the tax obligation.
Time of supply rules determine GST on lease rentals: if an invoice is issued within the prescribed period, tax liability arises at the earlier of invoice date or receipt of payment; if no timely invoice, liability is the earlier of provision of service or receipt of payment; if neither applies, the recipient's book entry fixes time of supply. Thus, an issued invoice triggers liability in the following tax period, whereas absence of invoice ties liability to actual receipt. Invoice date and contract due date are material.