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GSt on bad debt

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dhaneswar sutradhar

Inspector

28 Points Posted on 05 November 2023

Is GST applicable on bad y?

Replies (4)

Quick Summary

This discussion clarifies the application of GST on bad debts. While Input Tax Credit (ITC) must be reversed if a supplier isn't paid within 180 days, this rule applies to the recipient, not the supplier. For suppliers to reverse GST on bad debts, they typically need to issue a credit note, which is usually only possible for goods returned or rate differences. Ultimately, the consensus is that bad debts themselves don't attract GST as the supply was legally made; it's a payment issue.

Deeptha Srinivasa Ragavan

Article Assisstant

233 Points Posted on 05 November 2023

There is a concept of ITC reversal if payment not honoured with in 180 days. Hence, reversal should be made.

rohan

artical

4 Points Posted on 06 November 2023

PROVISION OF ITC REVERSAL IS AGAINST PURCHASE WHOM PAYMENT NOT MADE WITHIN 180 DAYS.

NO REVERSAL OF GST LIABILITY APPLICABLE TO SUPPLIER.

FOR REVERSING OF GST ON BAD DEBT SUPPLIER HAVE TO FIRST ISSUE CREDIT NOTE AND THEN HE CAN ABLE TO REVERSE GST ON SUPPLIES IN GSTR 1

TAX CREDIT NOTE AGAINST SALE IS ONLY POSSIBLE FOR GOODS RETURN WITHIN PROVIDED PERIOD OR FOR RATE DIFFERENCE.

IN MY OPINION NO BURDEN OF GST WILL REDUCE IN BAD DEBTS CASES.

ITS MY OPINION..

V SUBRAMANIAM

Tax consultant

552 Points Posted on 06 November 2023

Bad debts happens only customer didn't make payment.if we didn't pay to supplier within 180 days itc reverse applicable.in this case GST should have been paid and need not pay again.