GST on Compensation Received, Goods and Services Tax - GST

[Ethirajan Parthasarathy]

“A” supplies Raw material to “B”. It so happens that ouput of “B” by using “A”s supply turns out to bad / nonsaleable. To maintain good relationship and keeping commercial expediency in view, “A” agrees to pay compensation to “B” calculated at sale value of defective output. It is proven that “B” output has become non-saleable because of raw material supplied by “A”.

Question :-

Whether “B” is liable to pay GST on Compensation amount received from “A”

Posts / Replies

[YAGAY andSUN]

Please refer following article in connection with your query: -

https://www.taxmanagementindia.com/visitor/detail_article.asp?ArticleID=9223

[Ganeshan Kalyani]

Sir, the compensation amount is taxable in the hand of "B".

[DR.MARIAPPAN GOVINDARAJAN]

B is liable to pay GST on compensation amount received from A