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Written Back of Liabilities as on more the 3 years ( Material and Services), Service Tax

Issue Id: - 114704
Dated: 1-3-2019
By:- Prem Choudhary
Written Back of Liabilities as on more the 3 years ( Material and Services)

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Dear expert

please advice for consequences in Service tax, Excise and GST , if we are written back the Credit balance of Creditors ageing more then 3 years.

Posts / Replies

Showing Replies 1 to 9 of 9 Records

1 Dated: 2-3-2019

Dear Querist, Written back means already written off and now you want to write back. Pl elaborate on what account earlier these were written off. More details are required for correct reply. Prima facie, writing back will impact all the taxes mentioned by you but how and to what extent, reply is possible only after more details are posted.

2 Dated: 2-3-2019
By:- Prem Choudhary


Terms of "Written Back" means the liabilities(Creditors or provisions) which are credit balance(payable) however this is no longer require to pay, the balance may be for supply of material or Services rendered in past( here more then 3 years).

For written back entry :-

These balance of respective of liabilities are debited and Credited to Profit and loss account .

3 Dated: 2-3-2019
By:- Ganeshan Kalyani

In my view the input tax credit already taken on the purchase from the vendor (creditor) whose liability has been written off need to be reversed.

4 Dated: 2-3-2019
By:- Ganeshan Kalyani

As per section 16 (2)(d) of CGST Act, states that if a recipient fails to pay to the supplier of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, the amount towards the value of supply along with tax payable thereon within a period of one hundred and eighty days from the date of issue of invoice by the supplier, an amount equal to the input tax credit availed by the recipient shall be added to his output tax liability, along with interest thereon, in such manner as may be prescribed:

Provided also that the recipient shall be entitled to avail of the credit of input tax on payment made by him of the amount towards the value of supply of goods or services or both along with tax payable thereon.

Hence, if the amount payable to the creditor that is the supplier is written in that is not paid then credit should be reversed .

5 Dated: 2-3-2019
By:- Prem Choudhary

Amount is related to earlier taxation i.e Excise and Service tax period.

6 Dated: 3-3-2019

I agree with Sh.Ganeshan Kalyani Ji .His reply is also applicable for pre-GST.

7 Dated: 3-3-2019
By:- Ganeshan Kalyani

Thanks Sri Kasturi Sir.

8 Dated: 3-3-2019

Sh.Ganeshan Kalyani Ji, On the basis of your replies posted in accounting matters for the last three years, it is my observation that you are specialist in commerce or accounting matters in relation to Service Tax and GST. This is a fact no exaggeration.

9 Dated: 4-3-2019
By:- Ganeshan Kalyani

Thank you so much Sri Kasturi Sir for your appreciation.


Old Query - New Comments are closed.

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