Section 16(2) and rule 37 of gst

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This query is : Resolved

karan kumar (Querist)

17 August 2019 Dear Experts,
Pls clarify:- section 16(2) of cgst act. And rule 37 State that if No payment is made to the supplier within the 180 days the ITC taken shall be added back to the output liability. Pls tell me if anyone has not paid within the stipulated deadline than how the ITC shall be add back to the output liability! Pls clarify with an example if possible....

Thanks In Advance
Karan

RAJESH SHUKLA

RAJESH SHUKLA (Expert)

17 August 2019 below the example
(B) ITC Reversed
(1) As per Rule 42 & 43 of CGST/SGST rules
(2) Others REVERSED THE ITC OF UNPAID INVOICE
(C) Net ITC Available (A) - (B)

karan kumar

karan kumar (Querist)

17 August 2019 Sir actually it's not about reversal of ITC, it's section state that if recipient fails to pay the consideration an amount equal to the ITC availed by the recipient shall be added to his output tax liability! Let me highlight this line shall be added back to his output tax liability, here it's state that shall be add back to his output tax liability. So pls clarify In this case how ITC shall be added back to output tax liability

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