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

Export of services GST liability may arise when foreign consideration is not received for supplies to a related enterprise.
For supplies of services by an Indian supplier to a related foreign enterprise where the place of supply is outside India, GST under IGST is treated as exigible if consideration in convertible foreign exchange is not received; constitutional challenges to that charging provision are noted but not resolved. Under the prior Service Tax regime, such outward supplies were not taxable in India, but the supplier cannot claim Cenvat credit for inputs or input services used for those supplies.