GST and Service Tax applicability

[Kaustubh Karandikar]

 1) XYZ(India) supplied services to PQR (U.K.) which is a related party / associated enterprise but not charged GST being an export of service. Subsequently, PQR denied to make the payment and therefore XYZ had written off the amount from books. Is XYZ required to pay GST even if consideration is not received since the services are supplied to related party?

2) During Service Tax regime, XYZ (India) supplied services to PQR (U.K.) which is a related party / associated enterprise but not charged service tax being an export of service. Subsequently i.e. in GST regime, PQR denied to make the payment and therefore XYZ had written off the amount from books. Is XYZ required to pay service tax even if consideration is not received since the services are supplied to related party?

AI Summary

XYZ Must Pay GST on Unpaid Services to PQR; No Service Tax Due, Cenvat Credit Unavailable XYZ (India) supplied services to PQR (U.K.), a related party, without charging GST as it was considered an export of service. When PQR refused payment, XYZ wrote off the amount. Amit Agrawal clarified that XYZ must pay GST as no convertible foreign exchange was received, despite the relationship with PQR. Regarding the Service Tax regime, XYZ is not required to pay service tax since the services were not in the taxable territory, but XYZ cannot claim Cenvat Credit for goods/services used. The place of supply is presumed outside India. These views are not professional advice.