No Supply, No GST: Lessons From An Arbitral Award

Raj Jaggi | Last updated: 24 March 2026

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This article explains that under GST law, tax is levied only on 'supply' of goods or services, not merely on the movement of money. Even large financial settlements or payments arising from arbitral awards are not taxable if they don't constitute a 'supply' as defined by law. The case of Aayra Limited and Anish Global Inc. illustrates how payments like refunds of bank guarantees, compensation for delays, or interest awarded are considered settlements of past disputes rather than new taxable supplies.

When Money Moves, But Tax Does Not In everyday thinking, we often assume a simple rule - if money is received, tax must follow. But taxation, especially under GST, does not operate on such a straightforward assumption. The law is far more precise and selective. GST is not concerned with every movem

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About the Author

Raj Jaggi

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CA. Raj Jaggi is a Chartered Accountant based in New Delhi, primarily practising in the field of Goods and Services Tax (GST) consultancy, litigation support, and advisory services. After being associated with the leading indirect tax firm A.K. Batra and Associates for nearly 19 years, from June 2007 to March 2026, he ... Read more

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