hi,
the contractor was alloted with supply of manpower in our organizations.. though he was registered under gst act.. he never raised gst invoice n claimed.. after completion of contract period he receivied notice from gst department ..he remitted gst with penalty..now he is claiming for reimbursement of gst amount paid by him from our organization.. do we have any obligation to reimburse him the gst amount? or we can reject him claim since it is supplier responsibility to raise tax invoice n claim gst?
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Generally, under the Goods and Services Tax (GST) regime, it is the responsibility of the supplier to issue a tax invoice and collect GST from the recipient of the goods or services. If the contractor failed to raise GST invoices and subsequently received a notice from the GST department, it indicates that there may have been a non-compliance issue on their part.
In such a scenario, the contractor's claim for reimbursement of the GST amount paid with penalties would depend on the terms and conditions of the contract between your organization and the contractor. The contract should outline the obligations and responsibilities of both parties regarding GST compliance and invoice issuance.
If the contract clearly stipulates that the contractor is responsible for raising GST invoices and complying with GST regulations, and they failed to do so, it may be reasonable for your organization to reject the reimbursement claim. However, it is crucial to review the contract and seek legal advice to ensure that your decision aligns with the specific terms and conditions and the applicable laws.
It is also worth considering whether there are any mitigating factors or circumstances that could influence the decision. Factors such as the nature of the relationship with the contractor, the impact on future business prospects, and any potential reputational risks should be taken into account.
Again, it is strongly recommended to consult with a qualified professional, such as a tax advisor or a legal expert, who can provide guidance tailored to your specific situation and the relevant laws and regulations governing GST in your jurisdiction.
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