Unpaid Suppliers: GST ITC and the 180-Day Rule

Originally shared on 2026-10-09. This post relates to the periods and dates stated below.

Claimed GST credit on purchase invoices that are still unpaid? Check your supplier payment ageing.

For GST-registered businesses, failure to pay the invoice value plus GST within 180 days of the invoice date generally requires payment or reversal of the input tax credit proportionate to the unpaid amount, along with applicable interest. This rule excludes supplies taxed under reverse charge.

Part-payments matter: review the outstanding portion of each invoice rather than treating every unpaid invoice as a full reversal. Credit reversed under this rule can be reclaimed after the corresponding payment to the supplier.

Before preparing your next GSTR-3B, match invoices with payment records, identify amounts crossing 180 days, and maintain a reversal-and-reclaim register.

Contact Kotla & Associates, Bengaluru, for assistance reviewing supplier balances and GST credit adjustments.