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Reg:-Repicent had not done payment with in 180 days

SonamGambhir (Accounts) (129 Points)

05 April 2020

Dear sir,

kindly tell us , our Recipient had not released our payment with in 180 days?
so we can do it??

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4 Replies

inderjeet saini (227 Points)
Replied 05 April 2020

As per gst act 2017, if recipient do not made the payment with in 180 days than he is liable to pay interest @ 18%, and reverse the ITC claim.

if supplier pay the tax amount on above transaction than he can issue the credit note to recipient. Reduce the output tax amount from next month output liabilities

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CA Naveen Chand (Chartered Accountant) (12739 Points)
Replied 05 April 2020

for the recipient - he has to reverse ITC and pay interest

you may ask for the payments from the recipient .

SonamGambhir (Accounts) (129 Points)
Replied 05 April 2020

Thanks sir

Shivam RC (Student) (23683 Points)
Replied 07 April 2020

As per the Second Proviso to Section 16(2) of the CGST Act 2017, if the Recipient fails to pay the consideration to the Supplier within a period of 180 days from the date of issuing invoice by the supplier, then the Recipient needs to reverse the ITC availed along with interest @ 18% and add to his Output Tax Liability.

Once he pays the entire consideration to the Supplier, then only he will be eligible to reclaim the ITC. But the Interest portion becomes his COST.

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