Applicability of GST on liquidated damages collected from Supplier of Goods located outside India

Kashinath Gorai (1 Points)

11 April 2020  
As per the terms of Purchase order placed on Foreign Supplier for import of goods, liquidated Damages (LD) shall be applicable, if delivery of Goods is not done as per delivery schedule given in Purchase Order. Since, LD is in the nature of tolerating an act (of late supply of Goods), it is to be treated as a Supply of Service.Whether, GST needs to be deposited to Govt on collection of such Liquidated damages. If yes, whether applicable GST amount can be collected/recovered from the Foreign Supplier.