QUESTION

Question 1. Is 180 days payment limit shall be also applicable in case of import. We have imported some material and paid IGST and taken ITC on the same. However, due to non payment to supplier, do we need to reverse ITC. As per provision of GST except RCM we have to reverse ITC in such case. IGST is paid under custom Act. section 5(3) and 5(4) of IGST Act is not applicable. Section 5(4) is already postponed. Please suggest. 2. Please elobarte the provision of GST in case of any amount recovered from staff for canteen. is there any tax planning. If not received any amount and what is the provision? Thanks

ANSWER

Facts of the case: Material imported and paid IGST and taken ITC on the same but payment is not made within 180 days. Whether reversal is required.
Applicability of GST in case of any amount recovered from staff for canteen.

Law Applicable : SECTION 16 OF CGST ACT
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 one hundred and eighty 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.

Interpretation: 1. The law requires payment of value with the tax amount which is not possible in case of imported goods.

In import you pay only the value to the supplier and not the tax amount. The tax amount is paid to the custom.
Thats way you can never take credit because you will never pay tax amount to the supplier It means intention of law is not to cover import. More over the import duty(custom + IGST) is paid by the importer and not by the supplier although it is not reverse charge but carry the same nature.

The tax is paid by you therefore credit should be allowed.

2. Amount collected from employees for providing canteen service is considered as consideration and will be covered under the definition of supply as per section 7. Thus GST will be applicable. The same decision is given by Kerala Authority of Advance ruling in case of M/s Caltech Polymers Pvt. Ltd. The same is enclosed for your reference.

Conclusion: It is not required to reverse the credit in case of import due to non payment within 180 days.
GST will be applicable on amount collected from employees for providing canteen service.(Reply dt. 8/2/2020)