Out-of-court settlement does not attract GST

Mumbai: The Telangana bench of the GST-Authority for Advance Rulings (AAR) has held that an amount paid to a sub-contractor as compensation by way of an out-of-court settlement will not be subject to goods and services tax (GST).  Under GST provisions, “agreeing to the obligation to refrain from an act, or to tolerate an act or situation, or to do an act constitutes a taxable supply of servic…