Reversal of ITC if no payment to supplier within 180 days

This discussion clarifies the Goods and Services Tax (GST) rule regarding Input Tax Credit (ITC) reversal when payment to a supplier is delayed beyond 180 days. Even if purchase order terms allow for delayed payment, businesses must reverse the ITC and reclaim it upon making the payment. While it's legally permissible to claim full ITC initially if Section 16(2) conditions are met, the consensus leans towards taking proportionate credit if payment terms are clearly beyond 180 days. The implications for interest accrual and the distinction between commercial and other credit notes are also touched upon.