GST amount holding and not releasing it

8 months 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