Reversal of Input Tax Credit in Case of non payment of consideration

Reversal of Input Tax Credit in Case of Non Payment of Consideration

 

As per Rule 2(1) A registered person, who has availed of input tax credit on any inward supply of goods or services or both, but fails to pay the supplier thereof the value of such supply along with the tax payable thereon within the time limit specified in the section 16(2)1, shall furnish the details of such supply and the amount of input tax credit availed of in FORM GSTR-2 for the month immediately following the period of 180 days from the date of Invoice.

Analysis of Rule

In case of non-payment of value of the goods/services & tax thereon to the supplier towards goods/services within period 180 days from the date of Invoice, then credit taken on such Invoice needs to be reported in the return of the month immediately following the period of 180 days.

 

As per Rule 2(2) The amount of input tax credit referred to in sub Rule (1) shall be added to the Output tax liability of the registered person for the month in which the details are furnished.

Analysis of Rule

The Amount of reversal will be added in the output tax liability of the assesses.

 

As per Rule 2(3) The registered person shall be liable to pay interest at the rate notified under section 50(1) for the period starting from the date of availing credit on such supplies till the date when the amount added to the output tax liability, as mentioned in sub-rule (2), is paid.

Analysis of Rule

In Addition to output liability, interest from the date of availment of credit till date of addition in the output tax liability.

 

 

 

 

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