Applicability of GST on Arbitration Award recd from GOI

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A government contractor, working for the Military Engineer Service, received an arbitration award in February 2017 for a contract initiated in 2005. Payment was received in August 2017, after GST became applicable. While previously exempt from service tax, the contractor sought clarity on GST liability for the award. The consensus was that GST is not payable as the award was passed before GST implementation. The discussion also covered how to reflect this in GSTR 9 for FY 2017-18, with advice to show it in reconciliation to match income tax figures.

GOVIND TANWAR

GOVIND TANWAR (Querist)
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28 January 2020 Hi Everyone,
We are Government Contractor and do work contract for Military Engineer Service (MES). We construct Army Cantonment.
We had received Work Contract from GOI in 2005 for Constructing Army Cantonment in Ahmendnagar. We started work and completed half of the work but the due some circumstance could not complete the work. Then we went to Arbitration court and won the Arbitration award for the same work in February 2017 but recd payment in August 2017 when GST was applicable.
As we were Government Contractor we were exempt from Service tax.
Do we have to pay GST on this Award or we are Exempt from paying the GST as the award was passed before the GST become applicable.

Thanks in advance

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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28 January 2020 GST not payable as award passed before GST applicable.

GOVIND TANWAR

GOVIND TANWAR (Querist)
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29 January 2020 Thanks for your reply.
In that case how do we show the Award Amount in GSTR 9 for F.Y 2017-18.
Should I show this amount in Exempt Income column as GST is not applicable.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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29 January 2020 No need to show such amount in GST return as it relates to before GST period.

GOVIND TANWAR

GOVIND TANWAR (Querist)
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30 January 2020 Sir but our CA says GSTR 9 is a Annual return its figure should match with the figure we have put in the Income tax return profit and loss account
Sir we have taken the Award money has income for the period.
Please suggest what we do ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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30 January 2020 Show it in reconciliation.......

GOVIND TANWAR

GOVIND TANWAR (Querist)
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03 February 2020 Thank you very much sir.
We have filed the return, and shown in the reconciliation.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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03 February 2020 Welcome.................

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