GST Rule 37 180-Day ITC Reversal and Interest Worksheet
If you do not pay a supplier within 180 days from the date of the invoice, you must reverse the input tax credit and pay interest, and you can claim it again when you pay. This worksheet shows which invoices cross that line and what it costs.
| Supplier | Invoice no. | Invoice date | ITC availed (Rs) | Days since invoice date (days) | Days since ITC availed (days) | ITC to reverse (Rs) | Interest at 18% (Rs) | Status | |
|---|---|---|---|---|---|---|---|---|---|
Rs 54,000 | Rs 6,391 | ||||||||
Rs 0 | Rs 0 | ||||||||
Rs 36,000 | Rs 4,882 | ||||||||
Rs 9,000 | Rs 976 | ||||||||
Rs 0 | Rs 0 |
Educational worksheet. Rule 37 of the CGST Rules and the proviso to Section 16(2) require reversal of ITC where the supplier is not paid within 180 days of the invoice date, with interest under Section 50(1). Part payments need pro-rata treatment, so adjust the ITC column to the unpaid portion. Confirm with your tax adviser.
Add a 180-day ITC exposure report to your ERP
Optional review of how vendor ageing and GST credit can be reported together.
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How to use the worksheet
List every open supplier invoice where ITC has been availed. Enter the ITC amount and the days since the invoice date. Enter also the days since the ITC was taken, because interest runs from the date of availing credit to the date of reversal. The worksheet flags the reversal and computes interest at 18 percent a year. Export to Excel and share it with accounts payable before the month end cutoff.
- Pull open items from your vendor ageing report.
- Work with the unpaid portion if you made a part payment.
- Reverse in GSTR-3B table 4(B)(2) in the month the 180 days lapse.
The rule in practice
The condition applies to supplies where payment of the value plus tax is not made to the supplier within 180 days of the invoice date. Exceptions exist, for example where the supplier has been paid by a mechanism such as settlement of liability through a contra or where reverse charge applies, since there is no payment of tax to the supplier. Once you pay, the credit can be availed again in the return of that month. The reversal and re-avail cycle is a timing cost, but the interest is real.
Mistakes to avoid
Teams count from the booking date rather than the invoice date. Others forget to track disputed invoices, advance payments, debit notes, and write-offs. Make sure your ageing report uses invoice date and the GST posting date together. Also confirm that rate and tax were part of the payment, because some vendors are paid only the base amount while a tax balance stays open.
- Counting from goods receipt date instead of invoice date.
- Ignoring MSME payment terms that also create interest exposure.
- Not re-availing ITC after later payment.
Frequently Asked Questions
Does the 180 days count from the invoice date or the receipt date?
It counts from the date of issue of the invoice. Use the invoice date printed by the supplier, not the date you booked the voucher or received the goods, and keep the ageing report on the same basis.
Can I claim the ITC again after I pay?
Yes. When the supplier is paid, the credit that was reversed can be availed again, subject to other conditions. Interest paid on the reversal is not refunded. Track the status column so re-availing is not missed.
Does this apply to reverse charge purchases?
The 180-day condition does not apply where tax is paid under reverse charge, because there is no payment of tax to the supplier. Confirm treatment for your case with your adviser.
What interest rate applies?
Interest is under Section 50(1) at 18 percent a year, from the date ITC was availed to the date of reversal. The worksheet uses a 365-day year. Check the current notified rate before filing.
If vendor ageing and GST credit sit in different reports, we can help you add a 180-day ITC exposure view to your ERP.
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