ADVACNE RECEIVED FOR WORKS CONTRACT SERVICE

[vinod jadhav]

client has recieved 1.5cr for loss of project fromt the receipient. client has shown amount as a payable in his balance sheet.

whether gst is payable on receipt of 1.5 cr?

Can client shown amount received for loss of project and not related with sales activity in GST?

AI Summary

GST on advance payments and compensation: taxability depends on characterization as supply or liquidated damages.
GST applicability depends on whether the receipt is an advance constituting consideration for a future supply-taxable at receipt-or a compensation/liquidated-damage payment that is not consideration and thus may be outside GST. Contract terms, settlement documentation and factual characterisation are determinative; works contracts are treated as services and advances against them generally attract tax unless bona fide compensation is established.