GST on Compensation: Liquidated Damages, Trade Settlements & Contract Breaches

In re South India Krishna Oil & Fact Pvt Ltd (GST AAR Andhra Pradesh)

In a significant ruling by the GST Authority for Advance Rulings (AAR) Andhra Pradesh, the taxability of compensation amounts, including liquidated damages, trade settlements, and damages collected for non-performance of contractual obligations or breach of the contract, was closely examined in the case of M/s. South India Krishna Oil & Fats Pvt Ltd.

Background and Legal Framework

Please become a Premium member. If you are already a Premium member, login here to access the full content.