Is GST reversable ?

[DINESH TIWARI]

Is GST reversable in case of Payment not received on Supply of Goods/Service within six months.

[KASTURI SETHI]

Relevant extract from C.B.E. & C. Flyer No. 19, dated 1-1-2018

(f) He should pay the supplier the value of the goods or services along with the tax within 180 days from the date of issue of invoice, failing which the amount of credit availed by the recipient would be added to his output tax liability, with interest [rule 2(1) & (2) of ITC Rules]. However, once the amount is paid, the recipient will be entitled to avail the credit again. In case part payment has been made, proportionate credit would be allowed.

[DINESH TIWARI]

Thank u Sir 

[Ganeshan Kalyani]

The recipient of goods or services shall have reverse the input tax credit that he has taken on inward supply of goods or services if he fails to pay to the supplier of goods or service the value of invoice with GST within the period of 180 days. Thanks.

[YAGAY and SUN]

Such ITC needs to be reversed along with interest and after receiving the payment ITC along with interest needs to be availed again.

[DR.MARIAPPAN GOVINDARAJAN]

Yes. ITC is to be reversed and interest is to be paid. If it is paid the credit may be again taken subject to the condition that one year shall not be lapsed from the date of invoice.

[Brijesh Verma]

Respected Govindrajan Sir

Kindly throw some more light on the "ONE YEAR FROM INVOICE DATE" condition.

[KASTURI SETHI]

Sir,

Here is a question of 180 days and not one year.

[YAGAY and SUN]

After the receiving of full payment the limitation to avail ITC would be like this:

No ITC beyond September of the following FY to which invoice pertains or date of filing of annual return, whichever is earlier.

AI Summary

Reversal of input tax credit: recipient must reverse credit if payment isn't received within the statutory period; reclaim after payment.
If a recipient fails to pay the supplier within the prescribed period, the recipient must reverse the input tax credit taken on that inward supply and pay interest; upon payment to the supplier the recipient may re avail the credit, and proportionate credit is allowed for partial payments, subject to existing temporal limits on claiming ITC under return filing rules.