GST - Plight of SME
We are a small service provider In EPC space in India. After GST, payments from suppliers have come to zero. Everyone wants their contracts redone. Some are also taking the opportunity to cancel the contracts mid way giving reason as change of financial amounts (though they are due to GST)
If this goes for a couple of months we will have working capital issues.
Is there any provision in GST rules where contract cancellation is not permitted under the excuse of gst.
You might feel this is not an issue if you havent faced itbut those who are facing it, its a big deal.
Await guidance on how to go about it and any provisions that may be there. more
If this goes for a couple of months we will have working capital issues.
Is there any provision in GST rules where contract cancellation is not permitted under the excuse of gst.
You might feel this is not an issue if you havent faced itbut those who are facing it, its a big deal.
Await guidance on how to go about it and any provisions that may be there. more
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If the contracts are "plus taxes" or "taxes extra", then the need for changing contract terms is lesser. If the prices agreed in contract are inclusive of taxes then amendments will be necessary for changes in such prices. I think the demand for changes in contract irrespective of whether it "plus taxes" or "taxes extra" or not, is for reasons other than applicability of GST rules as taxes and has more to do with the effect of efforts to capture into the system the whole chain of transactions, without any exclusions. more
Jul 18
one can ask for a contract to be redone only for the cause of change in taxation. and nothing wrong in this. you need to calculate the impact of gst and redo the contract. this is obvious. in case of cancellation of contract midway you can very well go to the terms of your contract and raise your voice against cancellation and apply the compensation clause if any designed in the contract. more
Jul 18
Customer Non Compliant / Non Registered - Vendor Compliant - Customer does not want to bear the additional cost of service due to GST. Not Likely to be resolved unless Customer takes up Registration and can avail credit for GST Paid. As a GST Compliant vendor, you're constrained to build relationships with compliant customers. more
Jul 18
GST for name sake-- TAX collected anywhere has to be paid. Contract is business deal and tax accounting is separate. Pay the due tax and cancel or keep moving with the existing contact for that is an individual/business interest. Pay the due tax and do your business your way.Fine. more
Jul 18
Customer Compliant - Vendor Non Compliant or Non Registered - Customer does not want to take onus of Reverse Charge Mechanism administration - specifically Vendor has been charging without Service Tax on grounds of being less than applicable revenue limit - as such, the cost of his service has increased due to GST. This is an issue for the Customer as he is not sure of being able to avail Credit / Refund of the Service Tax he has paid under the Reverse Charge Mechanism. Likely to be resolved once the initial Returns are filed and Credit / Refund availed. more
Jul 18
The Right to Terminate any contract is an in-alienable right subject to the terms of the Contract, and no reason needs to be specified for such termination, subject to due notice ... That said, under the GST regime, a customer would terminate for one of 2 reasons, each of which I will address seperately - Customer Compliant - Vendor Non Compliant / Customer Non Compliant - Vendor Compliant If both Customer and Vendor are either Non Compliant or Compliant, there is no reason to terminate. more
Jul 18
Anything involving tax cannot just be cancelled without paying the tax part. There can be a cancellation in the intial stage but never in between when the tax figure played its part and somethng collected has to be paid to Govt. more
Jul 18
