Rules 37 and 37A: non-payment and supplier non-filing

Rule 37 — not paid within 180 days

• If you don't pay the supplier (value + tax) within 180 days of the invoice date, reverse the ITC in the GSTR-3B of the month when 180 days end.
• Pay interest from the date the ITC was used.
• When you pay, reclaim the ITC (no time limit on re-claim).
• Doesn't apply to RCM supplies, deemed supplies without consideration, or additions to value like freight paid by the supplier on your behalf.

Rule 37A — supplier hasn't filed GSTR-3B

• If a supplier reported the invoice in GSTR-1/IFF but hasn't filed GSTR-3B for that period by 30 September after the end of the year, you must reverse that ITC by 30 November.
• Reclaim it once the supplier files GSTR-3B.

Tips

• Track supplier payments with the payables ageing report.
• Follow up non-filing suppliers and hold their payments if needed.
• Use GSTR-3B Table 4B(2) for these reversals so reclaims are clear.

Sources

• Central Goods and Services Tax Rules, 2017