Where a company raises a services export bill under LUT post which a partial credit note is given. Is the company required to pay IGST on the portion of invoice for which payment was not received as condition of export of services was not satisfied

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    GIG Team
    Sep 30, 2023 05:51 PM 1 Answers Supply
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    GIG Team
    Sep 30, 2023
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    The answer depends upon whether the Company fulfils the condition of Section 34 of the CGST Act, 2017 for raising a credit note. A Credit note under GST can only be issued in three cases - when goods supplied are returned, when taxable value or tax charged in that tax invoice is found to exceed the taxable value or tax payable in respect of such supply and in case where there is a deficiency in supplies made. In present case, the credit note does not seem to have fulfilled any of the said conditions and thus, in such case, person would not get benefit of reduction of transaction value by such credit note and in case of non-receipt of payment, would be required to discharge GST on such value. Accordingly, since the company fails to fulfil one of the conditions of Section 2(6) of the IGST Act, 2017, the supply would not qualify as export of services and the company would be required to pay IGST on such supplies.