Raman, the recipient of service paid the invoice amount to his supplier within 180 days from the date of invoice being 1st October, 2022 but failed to settle the GST amount as charged in the invoice and could not pay the

As per recent notification 26/2022 dated 26.12.2022, the rule 37, sub-rule (1) of CGST Rules regarding the reversal of input tax credit in the case of non-payment of consideration has been amended. A registered person, who has availed of input tax credit on any inward supply of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, but fails to pay to the supplier thereof, the amount towards the value of such supply whether wholly or partly along with the tax payable thereon, within the time limit specified in the second proviso to sub-section (2) of section 16, shall pay or reverse an amount equal to the input tax credit availed in respect of such supply proportionate to the amount not paid to the supplier along with interest payable thereon under section 50, while furnishing the return in FORM GSTR-3B for the tax period immediately following the period of one hundred and eighty days from the date of the issue of the invoice. Thus, the GST Officer is wrong and can reverse only the proportionate amount of ITC equal to the amount not paid to the supplier which is the amount of disputed GST charged in the Invoice. Here it is also required to be mentioned that as per newly introduced Rule 37A, if the supplier of Raman does not file his return GSTR 3B till 30 th September, 2023, Mr. Raman needs to reverse in FORM GSTR-3B on or before the 30 th day of November following the end of such financial year. In case ITC has not been reversed in FORM GSTR-3B on or before the 30 th day of November following the end of such financial year such ITC shall be paid along with interest thereon under section 50. However, the supplier subsequently furnishes the return in FORM GSTR-3B may re-avail the ITC for a tax period thereafter.