Gst Purchase of goods but payment in other name

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ARUN GUPTA (Querist)
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22 January 2023 We have made gst purchase on credit from a party. Now the party is asking to make payment in other firms name which is not gst registered. Can we make payment in other firms name? Will there be any problem in claiming ITC IN future? Please clarify?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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22 January 2023 When the other firm is not registered under GST, how can you pay GST to it?
When GST not paid, no question of ITC.
You are required to pay the payment who issues TAX INVOICE as per rules & regulations...

ARUN GUPTA

ARUN GUPTA (Querist)
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22 January 2023 But the party wants me to make payment in other name which is gst registered. What should I do?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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22 January 2023 Get its Tax Invoice before payment.

Manish

Manish (Expert)
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22 January 2023 Can a bill of exchange be used in this situation, sir?

ARUN GUPTA

ARUN GUPTA (Querist)
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22 January 2023 Tax invoice is already issued by the party?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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23 January 2023 If original party has issued Tax invoice, he is liable to report GST received in GST return, As such you can get its ITC. In that situation the payment should be made to original party.
You cannot get ITC benefit when you get bill of exchange from any another party, if original party cancel the tax invoice, when payment is not received from you to the bill issuer.

Manish

Manish (Expert)
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23 January 2023 Yes sir.
But if the seller gives a B/E with pay to third-party order, will that be sufficient?

ARUN GUPTA

ARUN GUPTA (Querist)
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23 January 2023 In my case tax invoice is issued by the original party and original party wants to receive payment in other firms name.

ARUN GUPTA

ARUN GUPTA (Querist)
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23 January 2023 Pl clarify what to do in my case?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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23 January 2023 If you get new Tax invoice from second party, its ok.
You need to pay the party from whom you get tax invoice with GST.