Compensation from Transporters Not Taxable as GST Since It Is Liquidated Damages: AAR Gujarat

In re Pon Pure Chemical India Private Limited (GST AAR Gujarat) The Gujarat Authority for Advance Ruling (AAR) examined whether compensation received by a company from transporters for losses arising during transportation of goods constitutes a taxable supply of services under paragraph 5(e) of Schedule II read with Section 7 of the Central Goods and Services Tax Act, 2017. The applicant transported chemicals through various transporters and recovered compensation where losses exceeded agreed tolerance limits or where defaults resulted in material shortages, quality deterioration, colour issue...