Steps to Take Against Buyer for Non-Payment of GST Amount
Since the buyer is not paying the GST amount and is rejecting the credit note, you can take the following actions:
1️⃣ Inform the Buyer About ITC Mismatch & Legal Consequences
Send an official email or letter stating:
- Non-payment of GST will cause an ITC mismatch in their GST returns.
- GST authorities may disallow their Input Tax Credit (ITC) during scrutiny.
- They may face interest, penalties, and legal action for claiming ITC without actually paying GST.
📌 Sample Message:
"Dear [Buyer’s Name],
As per GST laws, the Input Tax Credit (ITC) you claimed on our invoice is only valid if the corresponding GST amount is paid to us. Since you have not made the payment, it will lead to an ITC mismatch in your returns, which may attract GST department scrutiny, reversal of ITC, interest, and penalties. We request you to clear the pending GST amount at the earliest to avoid legal complications."
2️⃣ File a Civil Suit for Non-Payment
- If the buyer still refuses to pay, you can file a civil suit for recovery of dues in court.
- Ensure you have all proof of invoices, communication, and payment requests.
📌 Steps to File a Civil Suit:
- Send a Final Legal Notice (through a lawyer).
- If unpaid, file a suit under the Contract Act for recovery.
- The court may order the buyer to pay the due amount along with interest.
3️⃣ File a Complaint with GST Authorities
- Since GST is already paid in GSTR-3B, you can report the buyer to GST authorities.
- File a complaint on the GST portal or directly with the local GST office.
- The GST department may audit their ITC claims and take action.
📌 Steps to File a GST Complaint:
- Visit the GST Grievance Redressal Portal (https://selfservice.gstsystem.in/).
- Select "Complaint Against ITC Mismatch or Non-Payment of GST".
- Attach invoice copies, payment proof, and communication records.
- Submit the complaint and follow up with the jurisdictional officer.
Final Suggestion:
- Try settlement through negotiation first.
- If not resolved, pursue legal action for recovery.
- Keep all records of transactions and communication for proof.
Would you like assistance in drafting a legal notice or GST complaint letter?
