Answer

1. F

   Facts

   Rule 37 looks at whether the invoice value has been paid within 180 days. With on-account payments, a clear allocation to invoices is needed to show which are paid.

2. P

   Provisions and law

   • Rule 37, CGST Rules 2017If the supplier is not paid within 180 days of the invoice, the proportionate ITC is shown as reversed in the GSTR-3B for the tax period immediately after the 180 days, with interest under Sec 50; it is re-availed once payment is made. Not applicable to reverse charge supplies, and to deemed supplies without consideration.
   • Sec 155, CGST Act 2017The person who claims ITC has the burden of proving that the claim is genuine.
3. A

   Analysis

   A common method is first in first out: payments settle the oldest invoices first. Agree the method with the supplier and keep ledger confirmations. If your books show a running balance, prepare an ageing report showing invoices above 180 days. Without allocation, an auditor may treat all old invoices as unpaid.

4. C

   Conclusion

   1. 1Agree a payment allocation method with suppliers.
   2. 2Apply it consistently in your books.
   3. 3Run an invoice ageing report each month.
   4. 4Get yearly balance confirmations.

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.