Answer

1. F

   Facts

   GST law does not stop you agreeing such terms with your supplier. But remember Sec 16(2) second proviso and Rule 37: value plus tax must be paid within 180 days of the invoice, or ITC claimed must be reversed with interest.

2. P

   Provisions and law

   • Sec 16(2), second proviso, CGST Act 2017If the recipient does not pay the supplier the value plus tax within 180 days of the invoice date, an amount equal to the ITC availed is paid back with interest, in the manner prescribed in Rule 37.
   • 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 16(2)(aa), CGST Act 2017ITC is allowed only if the supplier has reported the invoice in GSTR-1 or IFF and it is communicated to the recipient.
3. A

   Analysis

   Many buyers release the tax portion only after the invoice shows in 2B, which pushes suppliers to file on time. This is a commercial term, so put it in the purchase order. Do not let the hold run past 180 days for invoices on which you already claimed ITC. Track the age of every unpaid invoice.

4. C

   Conclusion

   1. 1Add the term in purchase orders or vendor agreements.
   2. 2Release the GST portion once the invoice appears in 2B.
   3. 3Track invoice ageing against 180 days.
   4. 4Reverse ITC under Rule 37 if payment crosses 180 days.

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