Gst applicability

Can u guide me on gst applicability on minimum commitment charges.

Ex. For a minimum samples each year to be delivered and in case of any deficit the other party will have to pay minimum commitment charges for each deficit sample .

So whether gst is applicable or not.

Pls reply at the earliest.
Replies (4)
Quick Summary
This discussion explores the GST applicability on minimum commitment charges, specifically when a party agrees to a minimum number of services (like sample deliveries) and faces charges for any deficit. The core question is whether GST applies to these commitment charges, especially if the main supply is considered exempt. The consensus suggests that if the primary supply is exempt, GST generally won't apply to the commitment charges either, unless specific contractual terms or exemptions indicate otherwise. Further clarification on the nature of the supply and relevant GST regulations is advised.

GST applicable for outward supplies as per GST rules...

But,

Your query is not cleared and Elobrate Your details with supplies details...
X party agrees to provide few services and charge for the same to Y party .but it is charged as per sample basis .if Y party provide 1000 samples base amount of 12000 charged
if they provide any less minimum commitment charges of 8000 wll be charged for the deficit amount of samples .
so on that minimum commitment is gst applicable ??
bcs on 12000 gst is exempt as it is exempt service .
If supplies are exempt then Gst not applicable...

if supplies are taxable then Gst applicable for the supply of 1000 qty with rates...

in case rate will be reduced then it will be reversible with credit note...
Main supply is exempt
but the minimum commitment charges tax should apply na ?
if no which section or notification talks about this ???

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