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GST on Retention Money

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mahesh chitpur

nothing

59 Points Posted on 25 September 2021

Dear Experts,

In a project based company,can we claim GST ITC on retention money.
Full payment is not made some part at once. Some part is retained still completion of project.

Replies (2)

Quick Summary

This discussion clarifies whether GST Input Tax Credit (ITC) can be claimed on retention money in project-based companies. According to Section 13 of the CGST Act, 2017, tax must be deposited on the full invoice amount, even if only partially paid. You can claim ITC on retention money, but it must be paid within six months to avoid reversal with interest.

Rama chary Rachakonda

Master in Accounts & high court Advocate

9620 Points Posted on 25 September 2021

TREATMENT OF RETENTION MONEY UNDER GST;

Section 13 of CGST Act, 2017 provides that works contractor would be required to deposit the tax on the entire invoice amount, irrespective of the fact that only part of the invoice amount has been paid by the recipient.