GST on compensation received

[Kaustubh Karandikar]

XYZ received a Purchase Order from the local customer towards supply to be made prior to GST era but order cancelled by the supplier. XYZ filed a legal case against the customer and the verdict was in favour of XYZ. Therefore, the customer gave the compensation amount to XYZ but during the GST era. Whether XYZ is required to pay GST on the compensation received?

[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]

No liability.

[Padmanathan KV]

No GST on the compensation ordered by court

[KASTURI SETHI]

Compensation is not income and no GST is leviable.

AI Summary

No GST on Compensation for Canceled Pre-GST Purchase Order, Say Experts Unanimously XYZ received compensation from a local customer after a legal verdict favored XYZ, following the cancellation of a purchase order initially placed before the GST era. The discussion revolves around whether GST applies to this compensation received during the GST era. Four contributors, including Amit Agrawal, Shilpi Jain, Padmanathan Kollengode, and Kasturi Sethi, unanimously agree that GST is not applicable on the compensation amount. They assert that compensation is not considered income for GST purposes, and thus, no GST liability arises from it.