GST applicable on damaged bus

[KARAN VERMA]

Sir, bus of company is fully destroyed and insurance company gives consideration ₹ 10 lakhs out which profit is ₹ 3 lakhs after reducing WDV of bus as per Income Tax Act.

Whether GST required to paid on profit on damaged bus.

AI Summary

GST Not Applicable on Insurance Settlement for Damaged Bus; Classified as Actionable Claim Under Schedule-III A company received 10 lakhs from an insurance settlement after a bus was destroyed, with a profit of 3 lakhs calculated after reducing the written-down value as per the Income Tax Act. The query was whether GST applies to the profit from the damaged bus. Three respondents agreed that no GST is applicable since the amount is compensation for an insurance claim, not a supply of goods or services. Compensation is not considered income or consideration and is classified as an actionable claim under Schedule-III, thus exempt from GST liability.