GST on amount not paid to supplier

[Kaustubh Karandikar]

XYZ (India) imported goods from a supplier from Russia and the goods were physically received by XYZ along with a Bill of Entry and other documents. However, due to Russia – Ukraine war, payment was not made to the foreign supplier and the amount was shown as other income in the books of accounts. Whether XYZ is required to pay GST on it?

[Amit Agrawal]

NO, in my humble view.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[Shilpi Jain]

Writing back of creditors balance in books not liable to GST. No supply.

[Padmanathan KV]

Agreed with the views of experts. No GST is payable

AI Summary

GST on unremitted supplier amounts: amounts written back as other income do not constitute taxable supply and no GST arises. When an importer receives goods but does not pay the foreign supplier and writes the unpaid creditor balance into books as other income, that write-back is an accounting adjustment and not a supply; therefore, GST is not attracted on the written-back amount in absence of any separate taxable transaction.