GST REVERSAL ON ABOVE 180 DAYS

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This discussion clarifies the Goods and Services Tax (GST) implications when payments to suppliers exceed 180 days. It confirms that even if a supplier agrees to extended payment terms in a purchase order, Input Tax Credit (ITC) must still be reversed, and interest will be applicable. This rule holds true regardless of whether the extended payment is due to standard terms or follows specific events like machinery installation.

Shankar Rao

Shankar Rao (Querist)

20 December 2022 Dear sir,

If suppler agreed above 180 days payment as per purchase order, in this case also we need to reverse ITC and we have to pay interest na?
Please clarify

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

21 December 2022 Yes, reversal and interest applicable.

Shankar Rao

Shankar Rao (Querist)

21 December 2022 suppler agreed buyer pay term in order to purchase order after completion of installation of machinary ,it will take 250 days after that only buyer made payment to supplier. This case also we need to reverse na?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

21 December 2022 Yes in such a case also reversal required.

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