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Import of goods/service -ITC reversal if payment not made with in 180 days

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Rajkumar P

Manager - Accounts

24 Points Posted on 18 November 2024

Please clarify Import of goods/service -ITC reversal if payment not made to foreign supplier with in 180 days. Applicable or not as per under section 16 of CGST ACT Criteria and contidition

Replies (2)

Quick Summary

This discussion clarifies that the 180-day rule for ITC reversal on imports does not apply if payment isn't made to foreign suppliers within that timeframe. This is because the rule, as per Section 16 of the CGST Act and Rule 37, specifically excludes supplies where GST is payable under reverse charge, such as imports of services. For imports of goods, ITC is paid to customs, not the foreign supplier, thus the 180-day rule is irrelevant.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

121546 Points Posted on 19 November 2024

No, not applicable. This provision does not apply to supplies on which GST is payable on a reverse charge basis.

Aashok Kumar Sharma

Finance/Compliance Consultant

75675 Points Posted on 07 November 2026

The 180-day rule doesn't apply to imports or RCM:

• Sec 16(2) second proviso (with Rule 37): ITC must be reversed if payment to the supplier isn't made within 180 days of the invoice. It applies to supplies on which tax is paid under forward charge. Rule 37(1) expressly excludes supplies on which tax is payable under reverse charge.

• Import of goods: ITC is on IGST paid to customs on the bill of entry. The foreign supplier isn't paid GST, so the 180-day rule doesn't apply.

• Import of services: IGST is paid under RCM, which is excluded. No reversal.

• FEMA, however, requires payment for imports within 6 months (with extensions). That's a separate compliance.