Gst on liquidated damage

This query is : Resolved

Mrutunjay Nayak (Querist)
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06 March 2018 Example: "X Ltd." supplied material at a price of Rs. 1,00,000/-plus GST@18% to ''Y Ltd''. The due date for supply material by X Ltd to Y Ltd was 30.09.2017 as per purchase order. But "X Ltd" supplied the material on 14.10.2017 to "Y Ltd". Hence as per Purchase Order Clause (i.e. Liquidated damage is to be deducted @1% per week for delay in supply of material) " Y Ltd' deducted Rs.2000/- from total amount due to "X Ltd." as Liquidated Damage for delay in the supply of material for 2 weeks.

My query is whether this Liquidated damage (Rs.2000/-) deducted by " Y Ltd " which is income of " Y Ltd'' is subject to GST. i.e. Whether "Y Ltd " has to pay GST on this Rs.2000/- to appropriate Govt.

Please Explain with related section/Notification /Circular of GST ACT

Udaya Chandran

Udaya Chandran (Expert)
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07 March 2018 As per my opinion, Y Ltd can issue a Debit Note. GST may not be paid for this amount as it is already paid.

Vishakha Kejriwal.

Vishakha Kejriwal. (Expert)
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08 March 2018 Has the supply invoice been raised for Rs.100000/- or 98000/-.

Mrutunjay Nayak

Mrutunjay Nayak (Querist)
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12 March 2018 Supply invoice was raised For Rs.118000/-(including GST)

Vishakha Kejriwal.

Vishakha Kejriwal. (Expert)
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13 March 2018 No need to pay GST on Rs.2000/- as GST has already been paid on Rs. 100000/- .

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