GST Applicability if material shortage in transit

Video Tutorial Explanation by CA Satbir Singh in Hindi

Transporter account is debited for deficiency in providing transportation service like material shortage in transit and debit Note is issued to tranporter. In this case supplier does not issue credit note.

Whether these types of debit notes are liable to GST as deemed supply as tolerating an act

Answer :  It is tolerating an act or situation which is deemed service . Thus you should issue tax invoice charging GST to transporter

 

 

 

 

SCHEDULE II of CGST Act 2017

[See section 7]

ACTIVITIES TO BE TREATED AS SUPPLY OF GOODS OR SUPPLY OF SERVICES

….

5. Supply of services

The following shall be treated as supply of services, namely:—

…..

(e)

agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act; and

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