Non-Payment / Delayed Payment to Supplier over 180 Days
If you claimed input tax credit but did not pay your supplier the invoice value along with the tax within 180 days, the law steps in: a bill still unpaid means ITC to reverse with interest, and a bill paid late means interest where the reversal had fallen due (the credit is re-available on payment). Upload your supplier ledger and get a bill-wise working of both. Have many suppliers? Upload several files at once, or one workbook with a sheet per supplier, and get a single report with an index covering them all.
What the law requires
- Pay your supplier the value of the supply plus the tax within 180 days of the invoice date. Day 180 is still within the limit — the breach begins on day 181.
- If you do not, reverse the ITC proportionate to the amount not paid, with interest under Section 50, in the GSTR-3B for the tax period immediately following the 180 days.
- You can re-avail the credit once you actually pay the supplier — there is no time limit on re-availment for this reversal.
- Interest basis used by this tool: interest runs from the due date of the GSTR-3B for the tax period in which the 180 days expired (the return where the reversal falls due), up to the payment date — and is nil where the supplier was paid before that due date, since the reversal never actually fell due.
- This does not apply to supplies on which tax is payable under reverse charge, nor to supplies deemed made without consideration under Schedule I.
Second proviso to Sec. 16(2) CGST Act, 2017 · Rule 37(1) CGST Rules (as substituted by Ntf. 19/2022-CT w.e.f. 01.10.2022) · interest u/s 50 at 18% p.a.
What your file should contain
- Required columns
- Date (bill date, oldest first), Credit (purchase bills, including GST), Debit (payments you made, including GST)
- Optional columns
- GST% (else taken from the supplier’s ledger text, or the rate you set below), Date of ITC availed (defaults to the 20th of the following month)
- Formats
- Excel (.xlsx, .xls) or CSV. Title rows above the header are detected automatically. Payments are matched to bills oldest first (FIFO). Upload multiple files, or one workbook with a sheet per supplier — each becomes its own tab in an indexed report.
How the opening balance is treated
- CrAn opening balance on the credit side (payable) is taken as an unpaid purchase carried forward, and is included in the 180-day working like any other bill.
- DrAn opening balance on the debit side (advance to the supplier) is taken as a payment and set against the earliest bills. For an accurate result, add the underlying bill-wise details of that opening balance — otherwise the advance is matched to this period’s bills, which may not be the ones it actually relates to.
We read the rate from the ledger’s own text where it’s written (e.g. an account named “Cloth IGST 5%”). A supplier billed at one rate gets that rate throughout; if the ledger genuinely shows several rates, each bill keeps its own. Set the rate to use where none is written.
Bills still unpaid keep accruing interest, so we need a cut-off date. Defaults to today.
Drop file here or click to browse
One or more files — Excel or CSV with Date, Debit and Credit columns
How to read the report
Each purchase bill gets one row per payment applied to it, plus a row for anything still unpaid. The Status column tells you which case a row is:
- Paid within 180 days — nothing to do.
- Paid after 180 days — the credit is re-available since the supplier now stands paid, so ITC to Reverse shows nil. Interest runs from the GSTR-3B due date for the period in which the 180 days expired, up to the payment date — nil where the supplier was paid before that due date.
- Unpaid beyond 180 days — the ITC on the unpaid amount is still to be reversed; interest runs to your cut-off date and keeps accruing.
- Outstanding (within 180 days) — still inside the limit, but watch the date.
Amounts are treated as GST-inclusive, so the ITC is worked out as amount × rate ÷ (100 + rate). Interest is simple interest at 18% p.a. on actual days ÷ 365. The Excel keeps live formulas so you can trace every figure.
The report opens with a reconciliation line — rows read / used / skipped, and Credits − Debits = Closing. Tie that closing figure to your own ledger before relying on the report: if it matches, nothing was lost on the way in.
Disclaimer
This tool computes ITC reversal and interest under the second proviso to Section 16(2) of the CGST Act, 2017 read with Rule 37 of the CGST Rules, 2017 and Section 50, at 18% per annum on a simple interest, actual-days basis. Results are indicative and depend on the accuracy and completeness of the ledger you upload, on payments being matched oldest-first, and on the facts of each case. Reverse charge supplies are outside this proviso and should not be included. This is not professional advice. For notices, demands or disputed periods, consult a qualified GST professional — or contact us for expert support.