We manufacture Pharmaceuticals Machinery. We have purchased one unit from our vendor on July-20 with payment terms of balance 10% after installation and successful trial at our Customers site.
Please note that we have availed full GST credit in the month of July-20. But till date the installation is not done at our customer site and the 10% payment to vendor is still outstanding for more than a year.
As per GST provision payment to be made to vendor within 180 days from the date of supply. Under the above condition kindly advice us.
Pharmaceutical Machinery Firm Faces GST Credit Issues Due to Delayed Vendor Payment; Debate on ITC Eligibility Continues A pharmaceutical machinery manufacturer is facing a delay in vendor payment beyond 180 days, impacting their GST credit. They purchased a unit with terms of paying the remaining 10% after installation, which hasn't occurred. They have availed full GST credit, but the 10% payment remains outstanding. Responses suggest that since 90% of the payment, including GST, has been made, they can avail full Input Tax Credit (ITC). Some advise reversing the credit proportionate to the unpaid amount, while others argue that since the 10% isn't due, full credit can be retained. The discussion revolves around interpreting GST provisions regarding payment timelines and ITC eligibility. (AI Summary)
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