Can you claim Refund of GST Paid if Debtor become Bad debt

By | December 8, 2018
(Last Updated On: December 8, 2018)

GST Paid but Debtor become Bad debt

Here is the video Tutorial on explaining the provisions of  Bad debt under GST

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Mr. A provided services to Mr. B in November 2017  and paid due GST at the time of issuance of invoice. However, payment is not received from Mr. B till date and hence such amount due from Mr. B is written off in the Books of Mr. A.

 Can Mr. A claim the refund of such GST paid  ?

My Comment :- 

Mr B is require to Reverse Input Tax Credit availed with interest since the the invoice not paid in 180 days

MR A can not claim refund of GST  paid on outward supply of services after MR B debts become Bad Debts  since there is no provision in GST Act .

Relevant portion of  section 16 of CGST Act 2017 : Eligibility and condition for taking input tax credit.:-

Provided further that where a recipient fails to pay to the supplier of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, the amount towards the value of supply along with tax payable thereon within a period of 180 days from the date of issue of invoice by the supplier, an amount equal to the input tax credit availed by the recipient shall be added to his output tax liability, along with interest thereon, in such manner as may be prescribed:

Relevant portion of Section 54 of CGST Act 2017 : Refund of tax….

(3) Subject to the provisions of sub-section (10), a registered person may claim refund of any unutilised input tax credit at the end of any tax period:

Provided that no refund of unutilised input tax credit shall be allowed in cases other than—

(i)zero-rated supplies made without payment of tax;
(ii)where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies), except supplies of goods or services or both as may be notified by the Government on the recommendations of the Council:

Provided further that no refund of unutilised input tax credit shall be allowed in cases where the goods exported out of India are subjected to export duty:

Provided also that no refund of input tax credit shall be allowed, if the supplier of goods or services or both avails of drawback in respect of central tax or claims refund of the integrated tax paid on such supplies.

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