GST invoice and payment

GST invoice and payment

say we raise a gst invoice of 4 lakh on 1st dec 2017
gst will be 18% i.e. rs 72000
case 1 -now say payment is received on 5 th feb - isn't it wrong that i had to pay 72000 in january when i actually received any payment in februrary.
case 2- now say we don't receive payment till 31st march 2018 - how will i account for the same

case 3 - say we dont recieve payment even untill march 2019

this question is based on the fact that we actually have few 2 years bills which are still unpaid.
but the issue now is that i have to pay gst regardless of payment.

Asked 7 years ago in GST

Hello,

Yes, you are very well correct that you have to pay GST at the time of issue of invoice no matter you receive the payment later on or may not receive the payment at all.

But the law is such, according to the law the government will recover its taxes when its due, its your fault if you cannot/ do not recover your dues from the party concerned why should the government suffer from it. The law was the same even at the time of service tax/ vat, it is nothing new. (please note this is the government's view and hence the law is framed accordingly)

Trust this clarifies your query.

Feel free to call / get back in case of further clarifications.

Thanking You.

Regards,

Rohit R Sharma

BCOM, FCA, LLB, CERT. FAFP

Rohit R Sharma

CA, Mumbai

2104 Answers

95 Consultations

Talk to Rohit R Sharma

yes sir, this is not a new provision but service tax was very flexible but gst is rigid and strict, this is also one of the reason of rolling out of gst.

now the problem is the invoice with invoice number etc.
our customer are schedule banks,we provide valuation service to different branches of bank.

during service tax regime,we used to just make a provisional invoice and the bank used to make payment usaully in 3 months and we used to make payment in the quater we actually received the payments.

now in gst regime , we are making a actual tax invoice when we actual receive the payment along with the date of payment
but now the bank is saying that in order to receive the gst, you need to give a tax invoice.

the main reason why its not reasonable for us is that
a bank has 10- 20 branches in which we serve
each branch generates a bill every month i.e 10- 20 bill per month
now the head office of bank makes payment of 3 months together i.e. 30 -60 ( usually leaving out few bill, which usually contains 2 -3 same amont.
and the best part is there is no way to tell that the payment made is against which bill and bank never helps in this regard.

also say i give them tax invoice ,they will avail input tax credit, the law says that input tax credit will b added to output tax if not paided till 3 months. how does gov plans on checking payment of every bill?

Asked 7 years ago

tracking of every bill is not possible but if a person having turnover over 2 cr then GST Audit is mandatory ,thus auditor or on inspection these things can be traced ,

you are right as such rules are very strict but we have to pay taxes on time to avoid interest and penalty for safer side if possible raise invoices in the begging of every month instead of ending of the month by doing this you can temporary deffer your tax liabilities for around 50 days that can might be help you in running your business.

Lalit Bansal

CA, Delhi

776 Answers

61 Consultations

Talk to Lalit Bansal

Hello,

Totally agree on the Service tax invoice points but we can't help it rules are rules.

For the reversal of Input tax credit part as of now there is no checking mechanism but it is expected that they will develop a mechanism where the seller will have to declare the name of the buyers who have not made payment to the vendors against which the government may first give the buyers an opportunity of being heard and prove that rightful payment was made, in case they fail to do so, their credit might be reversed.

Trust this clarifies your query.

Feel free to call / get back in case of further clarifications.

Thanking You.

Regards,

Rohit R Sharma

BCOM, FCA, LLB, CERT. FAFP

Rohit R Sharma

CA, Mumbai

2104 Answers

95 Consultations