Answer

1. F

   Facts

   Yes. Nothing stops you from reversing earlier. Reversing as soon as you know you will not pay limits interest exposure.

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 50(3), CGST Act 2017Interest is payable on ITC wrongly availed and utilised, from the date of utilisation till reversal, at the notified rate (18 percent a year).
3. A

   Analysis

   If a supplier relationship has ended with a dispute and payment is unlikely, reverse the ITC in Table 4(B)(2) now. If you later pay, you can reclaim. This is cleaner than waiting and paying interest. Note the reason in your working.

4. C

   Conclusion

   1. 1Identify invoices you do not plan to pay.
   2. 2Reverse the ITC in Table 4(B)(2).
   3. 3Record the reason.
   4. 4Reclaim if payment is later made.

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