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. 

AI Summary

Whether GST paid under pre-31.03.2025 waiver must be expensed in FY2024-25 or limited by Sec 37(1) A taxpayer paid GST under a waiver scheme before 31.03.2025 but applied for waiver after March and received the order in FY 2025-26. One view in the forum states the payment must be recognised as an expense in FY 2024-25 because the tax was actually paid then, noting that GST itself is not an expense if input tax credit is available. Another respondent contends interest or penalty components are not allowable deductions under income tax law. The dispute therefore hinges on whether taxation accounts by payment date or on deductibility rules for interest/penalty.