Find
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.
GST
Rule 37 for capital goods purchases
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Provisions
Rule 37, CGST Rules 2017; Sec 16(2), second proviso, CGST Act 2017
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.
Close
- Check whether the supplier was paid by a lender.
- If yes, keep the disbursement proof.
- If the supplier gave credit, track 180 days.
- Reverse proportionate ITC if unpaid.
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