Vendor Payment delay behind 180 days

[SURYAKANT MITHBAVKAR]

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.

AI Summary

Input tax credit reversal: proportionate reversal may be required when vendor payment is delayed beyond statutory period.
Where full consideration is unpaid beyond the statutory period, the input tax credit attributable to the unpaid portion should be proportionately reversed; contributors disagree whether payment of the tax component alone allows full credit, but the conservative compliance position is to reverse the proportionate ITC attributable to the unpaid consideration and account for any interest liability.