GST implication on forfeiture of advance received

[Krishna Murthy]

Sir, What is the GST implication of advance received towards goods before GST but no sale is made and now the same is being forfeited as the party is no longer claiming the same.

AI Summary

Debate Arises Over GST on Forfeited Advances Received Pre-GST; Differing Views on Applicability Under Schedule II, CGST Act. A discussion on the Goods and Services Tax (GST) implications of forfeiting an advance received before the implementation of GST, where no sale was made, concludes with differing views. One participant argues that forfeiture is considered a service under Schedule II of the CGST Act and is liable to GST. Another participant concurs, stating that forfeiture now constitutes a service subject to GST. However, a third participant believes no GST is applicable since the advance was received before GST's implementation and no supply occurred.