Sec 16(2) - payment after 180 Days

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Mantu Agarwal (Querist)
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26 May 2022 Dear Expert,
As per sec 16(2) proviso - If recipient fails to pay to supplier within 180 Days from the date of issue of invoice by supplier, ITC has to be reversed with interest.

My query is :
Will it be applicable in case of Debit Note (not Invoice) raised by supplier in Sep-21 but submitted to recipient in May-22 (after 180 Days).

Is recipient eligible to avail ITC on such supplementary as 180 days time limit crossed ?

Pls clear my ambiguity on sec 16(2) and Sec 16(4) -
As per sec 16(4) ITC is eligible till Nov-22 for bills related to FY 21-22.

Udaya Chandran

Udaya Chandran (Expert)
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26 May 2022 As per the proviso, if the recipient fails to make payment for the supply within 180 days from the date of invoice/debit note, the recipient has to reverse the ITC availed. Again if the recipient makes payment for the said supply, after 180 days, he can take ITC on payment to such supplies.

In your case, you have received the debit note in May 2022, raised in Sep-21. The ITC of such debit note can be taken till November 30th 2022, after making payment for the same.

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