XYZ (India) supplied goods for export and taken advance payment against it. The foreign customer at the last minute cancelled the order and therefore XYZ had not returned back the advance to the customer.
1) If the foreign customer is a related party / parent company, is XYZ liable to pay GST on the advance forfeited?
2) If the foreign customer is an independent buyer and not related, is XYZ liable to pay GST on the advance forfeited?
GST Implications Analyzed: Forfeited Advance Payment on Canceled Export Order - Related vs. Independent Buyer Considerations A discussion on the Goods and Services Tax (GST) implications for XYZ (India) concerning a forfeited advance payment from a foreign customer who canceled an export order. The main queries are whether GST is applicable if the foreign customer is a related party or an independent buyer. Responses vary: some suggest GST is applicable on the forfeited advance regardless of the relationship, while others argue it may be considered an export of service with no GST liability. Additional details about the transaction and the status of goods are requested for a definitive answer. (AI Summary)
TaxTMI 
TaxTMI 
TaxTMI 
