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GST amount recovered from supplier, Goods and Services Tax - GST

Issue Id: - 118235
Dated: 16-11-2022
By:- Kaustubh Karandikar
GST amount recovered from supplier

  • Contents

1) Amount of GST with interest and penalty on GST recovered from the supplier for loss of ITC towards not filing the Return GSTR – 1 by the supplier. Whether GST is required to be paid on such amount recovered from the supplier?

2) Amount recovered from the customer towards ‘C’ Form not issued. Whether GST is required to be paid on such recovery?

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Showing Replies 1 to 8 of 8 Records

1 Dated: 16-11-2022
By:- KASTURI SETHI

Answer to both questions is YES. All three kinds of amounts are covered under Schedule-II (5)(e) of CGST Act.


2 Dated: 16-11-2022
By:- Kaustubh Karandikar

Thanks Kasturi Ji for your kind advice.


3 Dated: 17-11-2022
By:- KASTURI SETHI

Dear Sir,

Acceptances of opinion by you also boosts my morale. I am also grateful to you.


4 Dated: 17-11-2022
By:- Nikhil Virkar

Sir, is this recovery will be construed as consideration? As per Circular 178/10//2022 of 3rd Aug 22 whether this would be covered under the term supply? In my view ITC needs to be reversed in terms of Section 16 of CGST and to be recovered from the supplier as business call. Recovery of Interest and penalty would be out of tax net since these are in the form of fine/penalty. All such recoveries must be under financial debit notes. Please correct me if my view is incorrect.


5 Dated: 17-11-2022
By:- KASTURI SETHI

Sh. Nikhil Virkar Ji,

Yes each and every case has to be examined in the light of above circular.Every case has different facts and circumstances. You are right. Transaction/activity must conform to the definition of 'supply' and 'consideration' under CGST Act. for leviability of GST. If the transaction does not conform to 'supply' and 'consideration' , there will be no liability of tax under CGST Act.


6 Dated: 17-11-2022
By:- Kaustubh Karandikar

Thanks Nikhil ji for highlighting the recent circular and taking a different view.


7 Dated: 21-11-2022
By:- Shilpi Jain

While accounting in the books take these amounts as deduction to expenses and do not account it as other income.

It could be regarded to be in the nature reduction in the expenses.Agree that there is no separate supply and so no gst.


8 Dated: 24-11-2022
By:- Ganeshan Kalyani

This is favourable Circular for the taxpayer.


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