Reversal of input tax credit in the case of non-payment of consideration

In force From 22 Jun 2017 Act G.S.R. 610(E) of 2017 As on 09 Oct 2026

Act G.S.R. 610(E) of 2017 Ministry Finance Enacted 19 Jun 2017 In force 22 Jun 2017 Cited by 9 provisions

Rule 37 of the Central Goods and Services Tax Rules, 2017 deals with reversal of input tax credit in the case of non-payment of consideration. 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 The Act came into force on 22 Jun 2017.

1 [(1) 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 3 [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 4 [or reverse] an amount equal to the input tax credit availed in respect of such supply 5 [, 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:
Provided that the value of supplies made without consideration as specified in Schedule I of the said Act shall be deemed to have been paid for the purposes of the second proviso to sub-section (2) of section 16 :
Provided further that the value of supplies on account of any amount added in accordance with the provisions of clause (b) of sub-section (2) of section 15 shall be deemed to have been paid for the purposes of the second proviso to sub-section (2) of section 16 .
(2) Where the said registered person subsequently makes the payment of the amount towards the value of such supply along with tax payable thereon to the supplier thereof, he shall be entitled to re-avail the input tax credit referred to in sub-rule (1).] (3) 2 [****] (4)The time limit specified in sub-section (4) of section 16 shall not apply to a claim for re-availing of any credit, in accordance with the provisions of the Act or the provisions of this Chapter, that had been reversed earlier.
Amendment notes
1. Substituted (w.e.f. 01.10.2022) vide Notification No. 19/2022 - CT dated 28.09.2022.
2. Omitted (w.e.f. 01.10.2022) vide Notification No. 19/2022 - CT dated 28.09.2022.
3. Inserted (w.e.f. 01.10.2022) vide Notification No. 26/2022 -CT dated 26.12.2022.
4. Inserted (w.e.f. 01.10.2022) vide Notification No. 26/2022 -CT dated 26.12.2022.
5. Inserted (w.e.f. 01.10.2022) vide Notification No. 26/2022 -CT dated 26.12.2022.
Rule 37, The Central Goods and Services Tax Rules, 2017 (Act G.S.R. 610(E) of 2017).

Cross-references

Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.

This section refers to

Referred to by 9

Questions about Rule 37

What does Rule 37 of the Central Goods and Services Tax Rules deal with?

Rule 37 of the Central Goods and Services Tax Rules is headed "Reversal of input tax credit in the case of non-payment of consideration". 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

How do I find court cases under Rule 37 of the Central Goods and Services Tax Rules?

In judgments and charge sheets this rule is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: CGST Rules 2017 37, rule 37 CGST Rules 2017, rule 37 of the Central Goods and Services Tax Rules. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome.

What should I read with Rule 37 of the Central Goods and Services Tax Rules, and has it changed?

Its own text turns on rule 15 (Extension in period of operation by casual taxable person and non-resident taxable person), rule 16 (Suo moto registration), rule 50 (Receipt voucher), so none of them can safely be read on its own. 9 other provisions in this corpus refer back to it.

When did Rule 37 of the Central Goods and Services Tax Rules come into force?

Rule 37 of the Central Goods and Services Tax Rules, cited as CGST Rules 2017 37, came into force on 22 Jun 2017, having been enacted on 19 Jun 2017. It is in force as at the date shown on this page.

Other rules of this Act

Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Parsed from the consolidated PDF published by CBIC at taxinformation.cbic.gov.in. The provision list against which this parse was checked comes from the same portal, so a rule the document omits is still recorded. This page is not a substitute for legal advice.