Do we have to pay within 6 mos under gst
A person who provides services to us says that under the GST laws we have to pay him within six months. We are in financial difficulties. How can we cope with this situation? more
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Yes, as per GST law and rules payment to supplier has to be made within 6 months otherwise input credit availed is to be reversed. Credit can be taken again when actual payment is made. This is same rule as was in case of service tax. more
Apr 11
Mr Lakshmanan B M is right. As per GST law if a recipient of any supply or service does not pay the amount to the supplier of goods or services with in 180 days then he would not be liable for Input Tax Credit on such unpaid supply. This ITC would be reversed from his credit. So if you want to take the benefit of Input Tax Credit then you have to pay to the supplier with in 180 days of invoice. more
Apr 11
If the Invoice carries GST whether you pay him or not he is obligated to pay the government so he is right the government demands that GST is paid every month more
Apr 10
GST Legislation has no provisions whatsoever with regard to a Customer's payment practices. Please ask your Vendor to identify and provide the Section Number under the Act ... more
Apr 10
Thanks for the extensive quote ... refers entirely to treatment of input tax credit and rcm .... customer can withhold payment indefinitely, it only affects his Gst liability, not give any additional rights to the vendor .... more
Apr 10
Section 16 of CGST Act, 2017 says:
Provided further that where a recipient fails to pay to the supplier of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, the amount towards the value of supply along with tax payable thereon within a period of one hundred and eighty days from the date of issue of invoice by the supplier, an amount equal to the input tax credit availed by the recipient shall be added to his output tax liability, along with interest thereon, in such manner as may be prescribed which means Recipient of goods/services should pay to the supplier (Including Taxes), within 180 days from the date of issue of invoice, else the Input Credit shall be reversed.
Concluding the above indicates that, if the registered person avails credit on accrual basis and does not pay the invoice value to his supplier of goods or services or both within 180 days from the date of issue of the invoice, he would be required add the ineligible credit so availed, as his output tax liability in Form GSTR-2 in the month immediately succeeding the six-month period along with the interest thereof.
For Example: Mr.A(registered person) purchased goods from Mr.B on credit worth Rs.1000/- on 15th July 2017 and assuming the tax rate on such goods to be 18% , the CGST and SGST amount comes out to be Rs. 90/- each and the total invoice value is Rs.1180/-.Now according to second proviso to sub-section (2) of section 16 , Mr.A must pay the invoice value to Mr.B within 180 days from the date of invoice i.e. maximum by 11th Jan 2018 or else the credit availed earlier shall be reversed along with interest till the payment is not made. Now Rule 37 of the Central Goods and Services Tax (CGST) Rules, 2017 explains that the interest at the rate of 18% is to levied on Rs.180/- from the date of availing of credit of Rs.180/- in GSTR-2 for the m/o July’2017 till such the input tax reversal is added to the output tax liability for the m/o January’2018. more
Provided further that where a recipient fails to pay to the supplier of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, the amount towards the value of supply along with tax payable thereon within a period of one hundred and eighty days from the date of issue of invoice by the supplier, an amount equal to the input tax credit availed by the recipient shall be added to his output tax liability, along with interest thereon, in such manner as may be prescribed which means Recipient of goods/services should pay to the supplier (Including Taxes), within 180 days from the date of issue of invoice, else the Input Credit shall be reversed.
Concluding the above indicates that, if the registered person avails credit on accrual basis and does not pay the invoice value to his supplier of goods or services or both within 180 days from the date of issue of the invoice, he would be required add the ineligible credit so availed, as his output tax liability in Form GSTR-2 in the month immediately succeeding the six-month period along with the interest thereof.
For Example: Mr.A(registered person) purchased goods from Mr.B on credit worth Rs.1000/- on 15th July 2017 and assuming the tax rate on such goods to be 18% , the CGST and SGST amount comes out to be Rs. 90/- each and the total invoice value is Rs.1180/-.Now according to second proviso to sub-section (2) of section 16 , Mr.A must pay the invoice value to Mr.B within 180 days from the date of invoice i.e. maximum by 11th Jan 2018 or else the credit availed earlier shall be reversed along with interest till the payment is not made. Now Rule 37 of the Central Goods and Services Tax (CGST) Rules, 2017 explains that the interest at the rate of 18% is to levied on Rs.180/- from the date of availing of credit of Rs.180/- in GSTR-2 for the m/o July’2017 till such the input tax reversal is added to the output tax liability for the m/o January’2018. more
Apr 10
