input credit

[ashwin jivanlal]

Section 16 of CGST Act Povides Claims of Input Tax Credit,

sub section c of section 2 of section 16 put restriction on receiver of good/services on the basis of of credit reflected in 2B, receiver can claim credit only if supplier has filed form R1 and it is reflected in 2B.

sub section (d) of section 2 of section 16 provides that if receiver has not made the payments to supplier whithin 180 days from date of bill the receiver needs to reverse the input credit and liable to pay along with interest,

MY QUERY;

if supplier has paid tax and filed his form F1 showing the tax paid by him but receiver did not pay to supplier in 180 days , as per sub section c of 2 of 16 receiver can claim input credit but as per sub section(d) of 2 of section 16 receiver has not made payments to supplier in 180 days he has to reverce the credit and to pay with interest..

goverment has received gst payments in time the sufferer is supplier why gst is to be paid twice on same transaction double with interest? one supplier has paid in time and on reversal receiver will pay with interest. pl. answer.

AI Summary

Input tax credit reversal: failure to pay supplier within the statutory period triggers reversal and interest, subject to payment terms.
Section 16(2) proviso conditions continuance of input tax credit on payment to the supplier within a statutory period and mandates reversal plus interest where the recipient fails to pay. Contributors debate whether a supplier's prior tax payment or an agreed longer payment term prevents immediate reversal, arguing that the proviso operates upon an actual failure to pay (i.e., supplier grievance) rather than mere non payment at the statutory cut off; pre GST Cenvat circulars and cases are invoked to support a commercial context interpretation, and practical consequences including reclaiming ITC after payment and the applicability of interest are examined.