Non-payment of GST within 180 day:Non-payment of GST within 180 day:
We have an MOM with Vendor on supply of machinery and its maintenance with payment terms and condition. Vendor give invoice & deposit GST to Government. After that we take ITC. As per GST Rule, We have to pay to Vendor within 180 days. But our Payment terms we have to pay i.e. partial in six month, one year and balance in two year.
Question :-
1. Whether we have to reverse the GST, if we not pay to vendor in six month?
2. How we will get credit after Two years?
3. Please guide the exact language or wording to written in the contract to avoid these problems in future?
Company Faces GST Issues: Payment Terms Over 180 Days Risk ITC Reversal, Interest Liability Under GST Rules A company faced issues with GST compliance due to payment terms exceeding 180 days, contrary to GST rules requiring payment within that period to retain Input Tax Credit (ITC). Experts advised that failure to pay within 180 days necessitates reversing ITC, which becomes part of the output liability with interest. ITC cannot be claimed after two years, as it must be taken within one year of the invoice date. For future contracts, precise wording is essential to avoid such issues. One suggestion was to reverse and re-avail ITC after payment, though this could lead to interest disputes. (AI Summary)
TaxTMI 
TaxTMI 
TaxTMI 
