Itc reversal --Payment not made in 180 days

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This query is : Resolved

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This discussion clarifies the Goods and Services Tax (GST) Input Tax Credit (ITC) reversal rules concerning payments delayed beyond 180 days. If a buyer hasn't paid a supplier within 180 days of the invoice date, the buyer is generally required to reverse the ITC they've claimed. This reversal may include interest. However, the buyer can re-claim the ITC once the payment is eventually made to the supplier.

Kunjan

Kunjan (Querist)

20 October 2021 If supplier didn't collect his payment for 180 days n paid off his local mumbai gst properly, does purchaser still have to reverse itc? There is no loss to gst department then y to reverse?
Supplier paid from his pocket gst

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

20 October 2021 Buyer has not paid GST to seller how can he avail ITC.

Kunjan

Kunjan (Querist)

21 October 2021 buyer is paying now to supplier all money (its more than 180 days though from date of sale).

or

if buyer has to reverse itc now,
then can supplier cancell his sales today ?(as no realisation from buyer in 180 days) )

CMA Poornima Madhava

CMA Poornima Madhava (Expert)

21 October 2021 180 day time period is applicable to the buyer and ultimately the buyer is responsible for payment of tax. The seller just collects it from the buyer and pays to the govt. So as I understand, if the buyer has not paid within this time period, itc to be reversed (surprisingly with interest).

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CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

21 October 2021 Such reversed ITC can be claimed when payment is made after 180 days.

Kunjan

Kunjan (Querist)

21 October 2021 ok, i will reverse now (i think interest ill have to pay from date of using set off) and in near future, re-claim itc when i pay to supplier . ty all

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

21 October 2021 Yes, you can claim ITC when you pay to supplier.

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