Gst input reversal for non payment in 180 days

ITC / Input 1918 views 2 replies

Dhanamoorthy T

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25 Points Joined February 2013

One of my office clients has asked me about the non-receipt of Payment from Debtor in 180days.

What is the role of auditor under section 16(2)(d) of the GST Act if the payment is not made to the supplier of Goods in 180 days?? How this mechanism works?

Many are still confused with this act.

Posting the Provision Below

"Provided further that where a recipient fails to pay to the supplier of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, the amount towards the value of supply along with tax payable thereon within a period of one hundred and eighty days from the date of issue of invoice by the supplier, an amount equal to the input tax credit availed by the recipient shall be added to his output tax liability, along with interest thereon, in such manner as may be prescribed"

Replies (2)

Manas Das

1431 Points Joined June 2017

this is a liability on the recipient part to reverse the input credit if not paid within 180 days and it can be assessed by tax authorities on assessment or any grievance by supplier for which mechanism yet to come.

Vivek Vaish

CA Job

47 Points Joined September 2012

Is there any provision for the supplier to reduce its taxable supplies by the amounts of Sales remain unpaid for more than 6 month (180 days).

As it make sense, if recipient to reverse credit, supplier should also deduct taxable supply. Supplier can include the same again when he receives payment as the recipient shall also be able to take credit on payment.

Is there any provision for reversing invoices for Bad Debts.