Notice received GST

This discussion addresses how to account for a fake GST demand notice of Rs. 88,000. The user purchased goods from a supplier who subsequently failed to file their GST returns and closed their business. The Rs. 88,000 was paid via the cash ledger, and the user seeks advice on the correct accounting entry and whether it's treated as a penalty. It's suggested that the amount can be adjusted with the capital account, but it's better practice to show it as disallowed under Income Tax.