Our company is a project based company and we do have retention sum. We can only claim back the retention sum after the DLP period ended.
The question is the job is completed before 1st of June 2018 and suppose we need to bill customer with GST. Now is already October 2018, our customer release the payment certificate to us with GST amount.
We have submitted our last submission in the month of Sept’18. After discuss with our customer, they want us to back date the invoice to Aug’18 but we already submit our GST-03 for Aug’18. What can I do for this since I already submitted the GST-03?
My company did not have a back date invoice cases before.
Below is the DG’s Decision No. 3/2018 pertaining to RETENTION PAYMENTS (GST TRANSITIONAL ISSUE). Hope this will help clear your doubts.
Contractor A started a construction project in 1.1.2017 and due to complete in 30.6.2020. There is progress billing issued by Contractor A to the client who is a developer. Under this project, the developer may retain or hold a certain amount of money payable to the contractor known as retention sum. Contractor A can only claim the retention sum from the developer after the end of the defect liability period which is 6 months after the completion of the project (according to the contract).
Is Contractor A allowed to issue a tax invoice and account for GST in year 2020 after the completion of the project for the retention sum in his final GST-03 return?
(i) Tax Invoice issued before 1/9/2018 :
Contractor A is only allowed to issue a tax invoice relating to the retention sum before 1/9/2018 and account and pay for the output tax in his return for the last taxable period which is not later than 120 days from 1/9/2018 according to section 6(2) of the Goods and Services Tax (Repeal) Act 2018. However, contractor A is not allowed to issue a tax invoice on or after 1/9/2018. If Contractor A issues the tax invoice to the developer before 1/9/2018 and if the input tax is allowable then developer is entitle to make such input tax claim in his return for the last taxable period.
(ii) Invoice issued after 1/9/2018 :
Contractor A may issue an invoice for the retention sum in year 2020 but he is required to account and pay for GST on the retention sum for supply made before 1/9/2018 in his return for the last taxable period which is not later than 120 days from 1/9/2018.
However, the developer is not allowed to claim input tax relating to the retention sum.