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Vendor Payment delay behind 180 days, Goods and Services Tax - GST

Issue Id: - 117406
Dated: 5-8-2021
Vendor Payment delay behind 180 days

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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.

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Posts / Replies

Showing Replies 1 to 7 of 7 Records

1 Dated: 5-8-2021
By:- Rajagopalan Ranganathan


Since you have already paid 90% of the invoice amount to the supplier, you can avail of the full ITC. Only when you did not pay the full amount of the Invoice then only you have to reverse the credit taken along with interest.

2 Dated: 6-8-2021

If 90 % amount (including GST) is paid, only 10 % tax amount (ITC) is to be reversed i.e. partial payment, reversal will be proportionate to the amount not paid.

3 Dated: 8-8-2021
By:- Shilpi Jain

Agree with kasturi sir. There is one more view in this regard.. since the 10% amount is not due for payment, it can be said that there is no failure to pay tax and hence reversal of credit is not required w.r..t the 10% amount as well. That means entire credit can be taken as of now.

4 Dated: 8-8-2021
By:- Ganeshan Kalyani

I agree with the views of Sri Kasturi Sir. Since 90% payment is made then ITC proportionate to 90% is only eligible. Sect 16 states that the "value of supply along with tax payable thereon" shall be paid to the supplier within 180 days. There is not word which states that "amount due" shall only be paid. So in my view 10% proportionate ITC needs reversal.

5 Dated: 9-8-2021

Thanks for your Valuable reply.

Kindly note that we have paid to our vendor (90% of total value + 100% of GST Value)

In such case kindly advise whether we have to reverse the proportionate amount.

6 Dated: 9-8-2021

Sh.Ganeshan Kalyani's reply is very much clear. Note the language of Section 16 "value of supply along with tax payable thereon"

7 Dated: 14-9-2021
By:- Shilpi Jain

Assumin you are taking a safe stand of not taking credit to the extent not paid to endorse, and say your invoice value is rs. 100 + 18 gst and if you have paid 113 I.e. 85+18 to the supplier you can take credit to the extent of 113/118×18.

You cannottake entire 18 as credit


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