No GST on Balance Freight in Escrow Accounts: AAR

The Authority for Advance Ruling clarified that GST is not leviable on balance freight amounts deposited by shippers into escrow accounts where such funds are provisional and subject to adjustment. It held that tax liability arises only when consideration crystallises upon actual supply of service. Since escrow deposits do not immediately accrue as income to the carrier, they cannot be treated as taxable value. The ruling provides clarity to logistics operators and reinforces the principle that GST is transaction-based, not receipt-based.