Debit note to Supplier if Credit note not issued by Supplier

[Prem Choudhary]

Dear Expert

We have faces the issue for reversal of ITC in case of payment is not made to Supplier within 180 days of invoices and it is very painful to trace every month. The reason of hold amount may be diff. reason but major reason is quality of materials. and also the aging of vendor is increasing and vendor reconciliation is always open.

we have follow-up with the supplier but they are not issuing Credit Note.

please advice on above case how it is dealt with-

AI Summary

Dealing with ITC reversal under GST: issue a debit note when supplier delays payment beyond 180 days. A user in a discussion forum raised a query about dealing with the reversal of Input Tax Credit (ITC) under the Goods and Services Tax (GST) when payments to a supplier are delayed beyond 180 days, often due to material quality issues. The user noted difficulties in vendor reconciliation and the supplier's failure to issue a credit note. An expert advised issuing a debit note with GST. Another participant referenced Section 34 of the CGST Act, 2017, stating that while suppliers should issue credit or debit notes, buyers can issue a debit note referencing the supplier's credit note.