Rule 37 of CGST/SGST Rules: ITC Reversal on Non-Payment Within 180 Days

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This query is : Resolved

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This discussion clarifies the application of Rule 37 of the CGST/SGST Rules concerning Input Tax Credit (ITC) when a buyer offsets purchase amounts against sales amounts owed to the same supplier. The consensus is that ITC can still be claimed, provided the purchase and sales accounts are maintained separately to track actual payments. This ensures compliance with the 180-day payment rule for claiming ITC.

NIRMAL DAVE

NIRMAL DAVE (Querist)
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01 July 2025 Dear All,

Mr. A purchases goods from Mr. B and also sale goods to Mr. B

Mr. A pay to Mr. B after adjusting sale amount against purchase consideration.

Can Mr. A take Input tax credit of purchase made from Mr. B. (i.e. without actual payment of full consideration) in such case?

Do Mr. A has to maintain and settle purchase account separately from sale account to claim input tax credit?

Thanks & Regards
Nirmal Dave