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Liability under sundry creditors

Vikasanand Gupta (180 Points)

28 July 2020

how to calculate gst liability under sundry creditors showing in balance sheet for the Financial year 2017-18 &2018-19.

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11 Replies

Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 28 July 2020

There is no liability on sundry creditors.
or your query is not clear
pls elobrate your query.

1 Like

Vikasanand Gupta (180 Points)
Replied 28 July 2020

Sagar Ji,

one of the taxpayer has shown a huge sum of amount in their sundry creditors head during the financial year 2017-18 & 2018-19. As such they have purchased goods from their sundry creditors.

But showing them in the balance sheet even after passing of two years that the taxpayer has not made payment to their sundry creditors and available ITC on said purchase. which appears to be recoverable.

Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 28 July 2020

If taxpayer has not made payment to creditors, from whom they purchased the Goods within period of 180 days than taxpayer is required to reverse the Input tax credit which taken earlier in GST return.

2 Like

Vikasanand Gupta (180 Points)
Replied 28 July 2020

Thanks Sagar Ji

Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 28 July 2020

You are most welcome.

1 Like

Pankaj Rawat (GST Practitioner) (55030 Points)
Replied 28 July 2020

Yes As per the Proviso under Section 16 of CGST Act R/w rule 37 , if the Recepeint fails to pay supplier for goods & Services or both supplied to him within 180 days is required to Reverse the same with interest

Vikasanand Gupta (180 Points)
Replied 29 July 2020

Thanks Pankaj ji.

it means the sundry creditors, who reflected in the taxpayer's balance sheet, the taxpayer has be reverse the ITC or pay the equal amount of ITC along with interest and penalty as applicable.