GST Paid whether allowed as expenses

[Mihir Modak]

GST is paid under GST Interest and Penalty Waiver Scheme before 31.03.2025. The application for waiver is made after March and Order is received post March 2025. Can GST paid be claimed as expenses of FY 2024-2025 ? Or the same will be allowed in FY 2025-2026 when the order is passed. 

[Sadanand Bulbule]

In this situation, it has to be recognised as expenses [GST itself is not an expense, if ITC is available] for FY 2024-25, the year of actual payment.  Even if the waiver order passed in  FY 2025-26, it has no relevance for this purpose.

[Ganeshan Kalyani]

In my view, the interest or penalty paid is not allowed as an expense as per Income tax law.

[Harshaditya Kabra]

When GST is paid under the GST Interest and Penalty Waiver Scheme before 31.03.2025, that payment is considered to be made in FY 2024-25 (ending March 31, 2025), even if your application for the waiver is submitted after March and the waiver order is received in FY 2025-26. The critical factor is the date of actual payment of the GST dues, not the date of waiver order

AI Summary

Recognition of GST payment depends on actual payment date; determines fiscal year for deduction despite later waiver orders. Recognition for income-tax purposes of GST payments made under a waiver scheme depends on the date of actual payment: payments made before the fiscal year-end are recognised in that fiscal year regardless of the timing of a waiver application or order. Where Input Tax Credit is available, GST is not an expense. Treatment of interest and penalty components may be contested, with a view that such components are not allowable under income-tax law.