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Setting off unpaid GST liability of one month against ITC of next month

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Mohan Kale

260 Points Posted on 17 March 2021

Party has unpaid GST liabilty (after considering available ITC) for January 2021 due to financial problem. And for February there is balance ITC available. Query is, can the party set off January liability against available ITC in February and pay the balance GST liability?

Replies (3)

Quick Summary

This discussion explores whether a business facing financial difficulties can offset an unpaid GST liability from January against available Input Tax Credit (ITC) in February. While directly offsetting is not permitted as February's ITC cannot be claimed for January, the conversation touches upon potential workarounds like retrospective reporting of sales, though the consensus leans towards facing the original liability.

V SUBRAMANIAM

Tax consultant

375 Points Posted on 17 March 2021

Verify 2b
February GST credit will not come in January.
no chance to set off.try

Mohan Kale

260 Points Posted on 17 March 2021

Of course it do s not. But can the party claim to have forgotten reporting if few sales bills of January and consider thise bills in February there by utilising all available credit and paying balance amount which works out to be 50% less than that if January. Many tax payers are facing financial issues and also their working capital gets affected due to heavy liability in one month but excess credit in subsequent month.