90,000+ Legal Questions Answered

GST amount holding and not releasing it GST amount holding and not releasing it

1 year ago

I am a regular GST tax payer not under any composite scheme. Need advice on a tropic where a vendor requests GST payment receipt before releasing it, in order to protect themselves as defaulters, where party is giving some services not selling any goods. How the vendor will be defaulters? if party do not pay GST payment on time after receiving it, they will be considered as defaulter; it is their responsibility to pay the tax on time after receiving it. Why should party pay the GST amount out of his own pocket before receiving it?

Need details on the relevant section(s) of the GST Act.
(1) When the party is a private limited company and registered GST user and the Vendor is not eligible to claim any reverse charge ITC from the raised Tax Invoice, does the vendor have the right to request a GST payment receipt before releasing the GST amount deducted from the Tax Invoice?
(2) Do vendors have the right to deduct and hold GST payments when releasing payment of any Tax Invoice? If Yes, what is the time limit the vendor should pay the GST amount to the party after receiving the payment receipt.
(3) Are there any guidelines that a party can follow to make a declaration under any section that would prevent the vendor from having to withhold GST before releasing the tax invoice amount?

Vendor - Private Limited Company and Registered GST user.
Party - Private Limited Company and Registered GST user
Invoice Type - Tax Invoice
Work Type - Service provider
Service Provide to other state - IGST (Durgapur, West Bengal)

Vidhikarya

A.Dear client,
Section 9(4) of the CGST Act states that if a vendor is not registered under GST supplies goods to a person registered under GST, then reverse charge would apply.
The due date for GST is 20 days after the end of the month. The due date for those registered under the composition scheme will be 18 days following the end of the quarter.
Helpful
Helpful
Share

Post Your Matter Post Your Matter

Talk to a Lawyer Talk to a Lawyer

Ask a question Ask a question

Vidhi Samaadhaan Vidhi Samaadhaan

Read Related Answers

question iconGst new Registration
Dear Sir, It depends upon local Government circulars. Please concert legal expert locally who is well versed with GST laws.
question iconP2P trading -crypto virtual digital assets
Dear clients, To legally resolve and expand your P2P trading business, especially in the face of frozen bank accounts and lack of bank support, here’s what you should consider: Comply with RBI and S...
question iconGst on redevelopment
Dear Client, According to latest regulations, GST is mostly applicable on the buying of under-construction properties at a rate of 5% for residential properties without the benefit of input tax credit...
question iconGST Invoice
Dear Client, A GST invoice is an electronic document generated when goods or services are exchanged. Sometimes, billing errors or changes in circumstances require correction. This requires invoice rev...
question iconGST amount not refunded
Dear Client, Yes, according to the rules of GST structure, it is possible to refund the GST amount together with the basic amount using a credit note. Section 34 of the CGST Act, 2017 provides that in...