GST Credit not available if Payment for Services not made in 3 months

By | March 17, 2017
(Last Updated On: March 17, 2017)

What is the time limit within which the recipient of service is liable to pay the value of supply with taxes to the supplier of service to avail input tax credit?

The time limit is three months from the date of issue of invoice by the supplier of service within which the recipient is liable to pay the value of supply along with taxes to the supplier of service to avail the input tax credit.

Where the amount is paid partly, then  Input Tax credit can be calculated proportionately.

Extract of Section 16(2) Eligibility and conditions for taking input tax credit  of Revised Model GST Law

PROVIDED FURTHER that where a recipient fails to pay to the supplier of services, the amount towards the value of supply of services along with tax payable thereon within a period of three months 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 the manner as may be prescribed.

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