Answer

1. F

   Facts

   Yes. Rule 37 applies whenever the amount is unpaid after 180 days, whatever the reason. If the dispute ends in a credit note, ITC reduces accordingly.

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 34, CGST Act 2017Credit notes and debit notes adjust tax on an invoice; a credit note must be declared by 30 November after the year or the annual return, whichever is earlier.
3. A

   Analysis

   Reverse the ITC on the unpaid portion in the next GSTR-3B. If the supplier issues a credit note for the defective goods, your ITC on that portion is reduced through the credit note, and you reclaim only on what you finally pay. Document the dispute in writing. Resolve it quickly to avoid double work.

4. C

   Conclusion

   1. 1Reverse ITC on the unpaid part after 180 days.
   2. 2Ask the supplier for a credit note for defective goods.
   3. 3Reclaim ITC on the amount finally paid.
   4. 4Keep dispute correspondence.

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