Question

We have import the goods by making payment of IGST to department but payment is not made to supplier within 180 days of import. Query: Weather reversal of Input Tax Credit taken as provided under Section 16(2) of CGST Act 2017 is applicable if the payment is not made to suppplier(Exporter) within 180 days but IGST is paid to department while clearance of goods.

Answer

The relevant provision is as follow

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:
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

That 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 there fore credit should be allowed

So we suggest you to not reverse the credit in case of import (Reply dt.20/12/2018)