I sell services to clients. One of my clients has paid the invoice but has not paid me the GST amount. They are delaying the GST amount for 1 to 2 months. Is this legal? Jason
Hi Jason
Ideally the payment should be done in total and not by separating GST amount. However, if some amount is paid later, there's nothing wrong in that. Payment for an invoice can be done in installments.
You need to show GST liability in the month of generating invoice and file GST returns accordingly.
The buyer would get ITC of such GST payment in the month of invoice only, so he should not make a delayed payment.
Hello Sir,
It is ok.
There is no problem in it.
- The intention of the buyer is clear that he does not want to pay tax. Tell him if you will not pay the amount within six months from the date of invoice then ITC availed by you will get reversed and will be available only when payment will be actually made.
Dear Sir,
Hope you are doing well !!
The point of taxation in GST is supply when there is a supply of Goods or services or both you need to pay tax on it irrespective of the recovery.
After paying the tax if you could not recover the amount you may raise a credit note against him and reverse the liability you have already paid.
And your client also has to reverse his input if he did not pay GST.
GST ITC Reversal if recipient fails to pay to the Supplier. ITC availed will be reversed in case of non-payment of consideration within 180 days from the date of Issue Invoice and shall be added to output tax liability along with Interest @ 18% p.a.
If he is not paying you the GST amount and if you think he is not going to pay you the GST amount you can consider the amount received as inclusive of GST and as full and final payment and calculate GST accordingly or pay GST out of your own pocket and later reverse the same if payment is not made in 6 months and your client would also not get the credit.
GST department wont help you in this as its fraud case and he might not pay you as he would not have taken services for business or he does not want the credit.
Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.
Thank you.
Hello,
Inform them that credit of tax in the invoice won't be available if the amount is not paid within 180days of the invoice.
Or else you can raise a credit note to the customer reducing the invoice amount in next GSTR-3B and thereby considering the invoice amount received as inclusive of GST.
I hope this answer satisfies your requirement.
Regards,
CA Hunny Badlani
