Gst on loan payable written off

[deepak gulati]

Sir,

We have a case where loan was taken in pre-gst regime and now the company is going to write off and treat it as income in profit and loss account. Will this be taxable under gst law?

Similarly if we write off some old creditors (pre-gst), it's taxability under gst.

AI Summary

GST Implications on Writing Off Pre-GST Loans: Are They Taxable? Differing Opinions on Service Classification and ITC Reversal. A query was raised about the GST implications of writing off loans and old creditors taken before the GST regime, and whether such write-offs, treated as income in the profit and loss account, are taxable under GST law. One opinion suggested these activities could be considered services under GST, requiring tax payment due to the act of writing back liabilities. Conversely, another opinion argued that such write-offs do not constitute a supply since there is no recipient, and thus no GST liability arises. It is advised to reverse ITC for creditors to avoid litigation.