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Penality allowed or not ,as expense

gurinder singh (3 Points)

21 October 2021  
Respected professionals
Please tell me if some one paid gst penality like for expiry of e-way bill ,is allowed as a business expense or not .Because we made a appeal against it and win the case. so in my opinion it is not in the nature of penality for us .
Thanks in Advance

 3 Replies

CA ABHAY GUPTA (Practice) (3134 Points)
Replied 21 October 2021

In case you won the appeal then it will be either refund to your bank account or might transfer to your cash ledger account, in both the cases it will not become part of your expenses thus there will be no question of disallowing aruse. If understand your question correctly then this will be my point oof view.

Kev Men (228 Points)
Replied 21 October 2021

Agree with the above answer.

However, if you had lost the appeal...penalty on GST would have been disallowed as per explanation 1 to Section 37.

gurinder singh (3 Points)
Replied 21 October 2021

Actually we not claim that amount due some issues because, department said the amount will be credit to the account of driver. so can we claim as expense

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