Answer

1. F

   Facts

   Rule 37 applies to capital goods too. If the supplier is not paid in full within 180 days, ITC on the unpaid part is reversed.

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 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.
3. A

   Analysis

   If a bank or NBFC finances the purchase and pays the supplier, the supplier is paid and Rule 37 is satisfied, even though you pay EMIs to the lender. If the supplier itself gives credit, the unpaid part triggers reversal. Check who the payee is in your financing arrangement.

4. C

   Conclusion

   1. 1Check whether the supplier was paid by a lender.
   2. 2If yes, keep the disbursement proof.
   3. 3If the supplier gave credit, track 180 days.
   4. 4Reverse proportionate ITC if unpaid.

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