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

Indian Company Avoids GST on Unpaid Russian Goods; Creditor's Balance Write-Back Not a Supply Under GST Rules XYZ, an Indian company, imported goods from a Russian supplier but did not make payment due to the Russia-Ukraine conflict. The unpaid amount was recorded as other income in XYZ's accounts. The discussion focused on whether GST is applicable on this amount. Three respondents, including Amit Agrawal, Shilpi Jain, and Padmanathan Kollengode, agreed that GST is not payable. They reasoned that writing back a creditor's balance does not constitute a supply and thus is not subject to GST.