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GST Reverse on Tax paid for service invoice

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A Murthy

Article Student

30 Points Posted on 15 March 2022

Can we claim or reverse GST paid for invoice raised in FY 2019-20 in FY 2020-21 due to client non payment. What is the procedure?
I know that the credit note should be issued before September. What is the solution now?

Replies (2)

Quick Summary

This discussion explores the possibility of reversing GST paid on an invoice from FY 2019-20 in FY 2020-21 due to non-payment by a client. While typically credit notes must be issued before September, the advice suggests that reversing the GST component now may not be possible. Potential solutions include the client cancelling the original invoice or issuing a fresh invoice with ITC.

CA Puja Sharma

Chartered Accountant

3528 Points Posted on 15 March 2022

You can now create Financial Credit Note which will not have GST component and reverse the client outstanding amount. But you cannot reverse the GST now.