Summary
IRAS has refreshed its GST guidance on payments made because a party failed to meet a contractual obligation or condition. Pure compensation with nothing supplied in return is not consideration and carries no GST, while payments tied to a supply of goods or services follow normal GST rules; new practical examples have been added.
What it means for you
Singapore entities of Indian groups should review damages, cancellation and termination clauses to decide correctly whether GST must be charged on such receipts.
This summary is general information, not legal advice. The outcome of any case depends on its facts; read the source and take advice before acting.
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