04 August 2022
Our A client made payments for spares parts onbehal of us and supplier bills inculding IGST issue to name of A client. But A client debit amount to us inculsding IGST, A party register in GST. This is correct.If he hav availed Input Tax Credit.
07 July 2024
Based on your description, it appears that your client (A) made payments for spare parts on your behalf and the supplier issued the invoice in the name of your client, including IGST. Here’s how the scenario typically works in GST:
1. **Payment by Client on Behalf of Supplier**: If your client (A) pays the supplier directly for the spare parts, and the supplier issues the invoice in the name of your client, this arrangement is valid under GST. Your client can make the payment and claim input tax credit (ITC) for the IGST paid, provided they meet all the conditions for claiming ITC under GST law.
2. **Input Tax Credit (ITC) for Client**: Since the supplier has billed your client (A) and charged IGST, your client can claim the IGST paid as ITC, assuming they are registered under GST and the transaction complies with GST rules (such as possession of valid tax invoice, payment to supplier within 180 days, etc.).
3. **Debit Amount to You**: If your client (A) debits the amount, including IGST, to you (the recipient of the spare parts), this can be treated as reimbursement of expenses or payment for the goods/services provided by the supplier. In GST terms, this is known as a reimbursement transaction, where your client is merely passing on the cost incurred on your behalf.
4. **Documentation and Compliance**: To ensure compliance: - Your client (A) should provide you with a proper tax invoice showing IGST. - You should recognize this invoice for claiming ITC if applicable to your business. - Your client (A) should maintain documentation to support their claim of ITC, such as invoices, proof of payment, and reconciliation statements.
5. **Verification and Reconciliation**: It’s important for both parties to verify and reconcile the invoices and payments to ensure accurate accounting and GST compliance. This helps in avoiding any issues during GST audits or assessments.
In summary, your client (A) can claim input tax credit (ITC) on the IGST paid for the spare parts, provided they follow GST rules and provide you with the necessary documentation. The debit amount to you should reflect the actual expenses incurred and should be supported by valid invoices and records.
For specific advice tailored to your situation, especially regarding GST compliance and ITC, consulting with a GST advisor or tax professional would be beneficial. They can provide guidance based on the detailed specifics of your transactions and help ensure compliance with GST regulations.
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