03 August 2024
If a supplier has not paid GST for the financial year 2018-19, but you have claimed input tax credit (ITC) and paid GST on your supplies, there are several implications and considerations to be aware of for filing GSTR-9 for FY 2018-19:
### **1. **Impact of Supplier's Non-Payment of GST**
**1.1 **Eligibility to Claim Input Tax Credit (ITC)**
- **Genuine ITC**: According to GST regulations, the recipient can claim ITC only if the supplier has paid the GST to the government and filed the necessary returns. However, if the supplier fails to pay GST, it generally impacts the ability of the recipient to claim ITC.
- **ITC Availability**: For the FY 2018-19, the rule was that ITC could be claimed based on the supplier's filings. If the supplier did not pay GST, you would be ineligible to claim the ITC related to that transaction.
**1.2 **ITC Reversal and Recovery**
- **Reversal of ITC**: If it’s found that the supplier did not pay GST, the ITC claimed would need to be reversed. This reversal is generally required to be done in the subsequent GST returns.
- **Impact on GSTR-9**: For GSTR-9 of FY 2018-19, you need to reconcile the ITC claimed with the ITC available as per the supplier’s GST returns. If ITC claimed was not reflected in the supplier's GST returns, you need to adjust your ITC.
### **2. **Filing GSTR-9 for FY 2018-19**
**2.1 **Disclosure Requirements**
- **ITC Reconciliation**: When filing GSTR-9, you must reconcile the ITC claimed with the ITC declared by the supplier. If there are discrepancies due to non-payment by the supplier, these should be adjusted.
- **Adjustment Entries**: If the supplier’s GST payment was not made, you should include adjustments in GSTR-9 to account for any ITC that needs to be reversed or corrected.
**2.2 **Impact on GSTR-9**
- **ITC Mismatch**: If your ITC claims do not match with what was reported by the supplier, you will need to reverse the excess ITC claimed in your GSTR-9. This will correct your GST returns and ensure compliance.
- **Penalties and Interest**: If it’s found that ITC was claimed based on the supplier’s non-payment of GST, you may be liable to pay interest on the reversed ITC. Additionally, penalties may apply if discrepancies are not resolved promptly.
### **3. **Additional Considerations**
**3.1 **Compliance and Rectification**
- **Supplier Follow-Up**: Contact the supplier to ensure that they are compliant and rectify any non-payment issues. This will help avoid future ITC problems.
- **Documentation**: Maintain detailed records of all communications and steps taken to address non-payment issues. This will be useful if there are any queries or audits from the GST authorities.
**3.2 **Professional Advice**
- **Consult a GST Expert**: Given the complexities involved, it’s advisable to consult a GST expert or tax consultant to ensure accurate reconciliation and compliance with GST regulations.
### **Summary**
For FY 2018-19, if your supplier did not pay GST, the impact on your ITC claim needs to be addressed in GSTR-9. You must reconcile the ITC claimed with what is reflected in the supplier’s returns and adjust for any discrepancies. If ITC was claimed on the basis of non-payment by the supplier, it will need to be reversed. Consult a tax professional to ensure that all necessary adjustments are made and to handle any compliance issues effectively.
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