Manpower supply - GST on deduction amount

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This query is : Resolved

kathir (Querist)

23 October 2019 Dear Expert,

We have received manpower service from A ltd and our payment terms is 30days. but vendor has demand to pay within 10days. so we have changed our contract payment term to pay within 10days and deduct 1% amount in the bill value. E.x Basic value 1000000 and GST 180000 total 1180000. but payment to the vendor is 1168200 after deducted 1% amount ( 11800).

My doubt is, We should raise any debit note to the vendor for that 1% amount deduction (Rs 118000 ).? Shall we avail ITC rs 180000.?

A.S.SUNDARARAJAN

A.S.SUNDARARAJAN

(Expert)

23 October 2019 Ask the vendor to raise Credit Note for the deduction amount and GST. Similarly you have to tale credit only for the basic amount less deducted value and no for the whole basic amount

kathir

kathir (Querist)

24 October 2019 Thanks sundararajan,
As per our mutual concern, Vendor only bear that 1% loss due to early payment received and nothing impact in GST value however the vendor has mentioned invoice value 1000000 & GST value rs 180000 in GSTR01 and its same has been reflected in GSTR 2A. So we have availed ITC rs 180000. In this kind of situation credit note from vendor is required.? or not required.?

A.S.SUNDARARAJAN

A.S.SUNDARARAJAN

(Expert)

24 October 2019 If gross amount is reflected in GSTR 2 A ,then there is no issue in GST . But in accounting aspect, credit note for deduction amount without GST is required for accounting of deduction amount. other wise you have to raise Debit note and that should be accepted by the vendor.

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