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 on write backs: treating accounting write back as a supply may create tax liability and ITC reversal consequences.
Whether GST applies to write offs of loans or creditors depends on whether the write back constitutes a supply (a service) because it produces consideration; if ITC was availed and payment to the supplier was not made within the statutory timeframe, Section 16(2) requires ITC reversal and may give rise to an outward tax implication on the write back amount. Conversely, mere accounting write backs may lack a supplier-recipient relationship and thus not constitute supply, and reversing ITC for creditors is advised to avoid double taxation.