Text
The text below is the rule as served by the CBIC tax information portal on 17 September 2026, with the portal's own amendment footnote markers (shown as small numerals before a bracket) and its footnotes.[1] The Rules as published in the Gazette of India is the legal source.
Rule 37, verbatim (show)
Rule 37. Reversal of input tax credit in the case of non-payment of consideration.-
1[(1) A registered person, who has availed of input tax credit on any inward supply of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, but fails to pay to the supplier thereof, the amount towards the value of such supply 3[whether wholly or partly,] along with the tax payable thereon, within the time limit specified in the second proviso to sub-section(2) of section 16, shall pay 4[or reverse] an amount equal to the input tax credit availed in respect of such supply 5[, proportionate to the amount not paid to the supplier,] along with interest payable thereon under section 50, while furnishing the return in FORM GSTR-3B for the tax period immediately following the period of one hundred and eighty days from the date of the issue of the invoice:
Provided that the value of supplies made without consideration as specified in Schedule I of the said Act shall be deemed to have been paid for the purposes of the second proviso to sub-section (2) of section 16:
Provided further that the value of supplies on account of any amount added in accordance with the provisions of clause (b) of sub-section (2) of section 15 shall be deemed to have been paid for the purposes of the second proviso to sub-section (2) of section 16.
(2) Where the said registered person subsequently makes the payment of the amount towards the value of such supply along with tax payable thereon to the supplier thereof, he shall be entitled to re-avail the input tax credit referred to in sub-rule (1).]
(3) 2[****]
(4)The time limit specified in sub-section (4) of section 16 shall not apply to a claim for re-availing of any credit, in accordance with the provisions of the Act or the provisions of this Chapter, that had been reversed earlier.
1. Substituted (w.e.f. 01.10.2022) vide Notification No. 19/2022 - CT dated 28.09.2022.
2. Omitted (w.e.f. 01.10.2022) vide Notification No. 19/2022 - CT dated 28.09.2022.
3. Inserted (w.e.f. 01.10.2022) vide Notification No. 26/2022-CT dated 26.12.2022.
4. Inserted (w.e.f. 01.10.2022) vide Notification No. 26/2022-CT dated 26.12.2022.
5. Inserted (w.e.f. 01.10.2022) vide Notification No. 26/2022-CT dated 26.12.2022.
Sub-rule (1)
37(1), payment or reversalUnpaid consideration and proportionate amount
shall pay or reverse an amount equal to the input tax credit availed in respect of such supply, proportionate to the amount not paid to the supplier,Rule 37(1), payment or reversal
A registered person who availed credit must pay or reverse it proportionately where supply value and tax are wholly or partly unpaid within the second proviso to section 16(2). Reverse charge supplies are excluded. The amount follows the portion not paid to the supplier.
Questions to answer on the fileNon-payment trigger4 questions
Questions to answer on the fileProportionate amount to pay or reverse7 questions
Questions to answer on the fileInvoice clock and reporting period6 questions
Questions to answer on the fileReferenced interest payment2 questions
37(1), interestInterest accompanies the amount
shall pay or reverse an amount equal to the input tax credit availed in respect of such supply, proportionate to the amount not paid to the supplier, along with interest payable thereon under section 50Rule 37(1), interest
The recipient must include interest under section 50 with the payment or reversal. The invoice-based reporting period in sub-rule (1) governs when that amount is reported in FORM GSTR-3B.
37(1), reporting periodInvoice clock and return
while furnishing the return in FORM GSTR-3B for the tax period immediately following the period of one hundred and eighty days from the date of the issue of the invoiceRule 37(1), reporting period
Invoice issue starts the one hundred and eighty days. The immediately following tax period identifies the FORM GSTR-3B in which payment or reversal is made.
37(1), first provisoSchedule I deemed value
the value of supplies made without consideration as specified in Schedule I of the said Act shall be deemed to have been paidRule 37(1), first proviso
The deeming covers value of the specified supplies without consideration. It applies for the second proviso to section 16(2) and treats supply value as paid.
Questions to answer on the file2 questions
37(1), second provisoSection 15 additions
the value of supplies on account of any amount added in accordance with the provisions of clause (b) of sub-section (2) of section 15 shall be deemed to have been paidRule 37(1), second proviso
The deemed payment covers supply value arising from the specified section 15(2)(b) addition. It applies for the second proviso to section 16(2).
Questions to answer on the file2 questions
37(2)Re-availment after payment
Where the said registered person subsequently makes the payment of the amount towards the value of such supply along with tax payable thereon to the supplier thereof, he shall be entitled to re-avail the input tax credit referred to in sub-rule (1).Rule 37(2)
Subsequent payment must be towards supply value and tax to the supplier. The law does not settle the meaning and allocation of payment, including set-off and partial subsequent settlement.
Questions to answer on the file4 questions
37(4)Re-availment time-limit exception
shall not apply to a claim for re-availing of any credit, in accordance with the provisions of the Act or the provisions of this Chapter, that had been reversed earlier.Rule 37(4)
The section 16(4) time limit does not apply to a claim to re-avail credit that had been reversed earlier. The words "in accordance with the provisions of the Act or the provisions of this Chapter" may be read with the claim or with the earlier reversal; the sub-rule does not say which.
Questions to answer on the file2 questions
Frequently asked questions
Does the rule cover reverse charge supplies?
Supplies on which tax is payable on reverse charge are excluded from sub-rule (1). The non-payment requirement applies to the other inward supplies within its scope.
Rule 37(1)
What happens when only part of the consideration is unpaid?
The recipient must pay or reverse credit proportionate to the amount not paid to the supplier, with interest under section 50. The wording expressly covers failure to pay wholly or partly.
Rule 37(1)
Can set-off or partial later settlement support re-availment?
The law does not settle the meaning and allocation of payment, including set-off and partial subsequent settlement. Sub-rule (2) refers to subsequent payment of supply value and tax to the supplier.
Rule 37(2)
Does section 16(4) limit taking previously reversed credit again?
No. Sub-rule (4) says the section 16(4) time limit does not apply to a claim for re-availing credit that had been reversed earlier.
Rule 37(4)
Amendment history
The CBIC text carries 5 footnotes. The table gives each in the source's own terms. Effective dates are as the footnotes state them.[1]
| Note | Change |
|---|---|
| 1 | Substituted (w.e.f. 01.10.2022) vide Notification No. 19/2022 - CT dated 28.09.2022.[2] |
| 2 | Omitted (w.e.f. 01.10.2022) vide Notification No. 19/2022 - CT dated 28.09.2022.[2] |
| 3 | Inserted (w.e.f. 01.10.2022) vide Notification No. 26/2022-CT dated 26.12.2022.[3] |
| 4 | Inserted (w.e.f. 01.10.2022) vide Notification No. 26/2022-CT dated 26.12.2022.[3] |
| 5 | Inserted (w.e.f. 01.10.2022) vide Notification No. 26/2022-CT dated 26.12.2022.[3] |
Relationship with other provisions
| Provision | Connection | Words that tie them |
|---|---|---|
| Section 16 of the CGST Act, 2017 | Section 16 of the CGST Act, 2017 prescribed by this provision | 16(2) second proviso "in such manner as may be prescribed" |
| Section 16 of the CGST Act, 2017 | this provision requires Section 16 of the CGST Act, 2017 | 37(1) "second proviso to sub-section(2) of section 16"; 37(4) "sub-section (4)"; 37(4) "section 16" |
| Section 15 of the CGST Act, 2017 | this provision defined by Section 15 of the CGST Act, 2017 | 37(1) second proviso "the value of supplies on account of any amount added in accordance with the provisions of clause (b) of sub-section (2) of section 15" |
| Section 50 of the CGST Act, 2017 | this provision requires Section 50 of the CGST Act, 2017 | 37(1) "interest payable thereon under section 50" |
| Schedule I of the CGST Act, 2017 | this provision requires Schedule I of the CGST Act, 2017 | 37(1) first proviso "the value of supplies made without consideration as specified in Schedule I of the said Act shall be deemed to have been paid" |
Circulars and notifications
Circulars and notifications in the CBIC repository that cite this rule, newest first, by number, date and subject. A listing here does not say what an instrument decides; read the instrument.
Circulars (3)
| Number | Date | Subject |
|---|---|---|
| Circular No. 170/02/2022-GST | 6 July 2022 | Mandatory furnishing of correct and proper information of inter-State supplies and amount of ineligible/blocked Input Tax Credit and reversal thereof in return in FORM GSTR-3B and statement in FORM GSTR-1 |
| Circular No. 105/24/2019-GST | 28 June 2019 | Clarification on various doubts related to treatment of secondary or post-sales discounts under GST - reg. withdrawn by a later instrument |
| Circular No. 7/07/2017-GST | 1 September 2017 | System based reconciliation of information furnished in FORM GSTR-1 and FORM GSTR-2 with FORM GSTR-3B - regarding. |
Notifications (8)
| Number | Date | Subject |
|---|---|---|
| Notification No. 13/2025-Central Tax | 17 September 2025 | Seeks to notify the Central Goods and Services Tax (Third Amendment) Rules 2025. |
| Notification No. 09/2025-Central Tax | 11 February 2025 | Seeks to bring rules 2, 8, 24, 27, 32, 37, 38 of the CGST (Amendment) Rules, 2024 in to force |
| Notification No. 38/2023-Central Tax | 4 August 2023 | Seeks to make amendments (Second Amendment , 2023) to the CGST Rules, 2017. |
| Notification No. 26/2022-Central Tax | 26 December 2022 | Seeks to make fifth amendment (2022) to CGST Rules |
| Notification No. 19/2022-Central Tax | 28 September 2022 | Seeks to make amendments (Second Amendment, 2022) to the CGST Rules, 2017. |
| Notification No. 74/2018-Central Tax | 31 December 2018 | Fourteenth amendment to the CGST Rules, 2017. amended by a later instrument |
| Notification No. 39/2018-Central Tax | 4 September 2018 | Seeks to make amendments (Eighth Amendment, 2018) to the CGST Rules, 2017 amended by a later instrument |
| Notification No. 26/2018-Central Tax | 13 June 2018 | Seeks to make amendments (Fifth Amendment, 2018) to the CGST Rules, 2017. |
See also
- Section 16 of the CGST Act, 2017: eligibility and conditions for taking input tax credit
- Section 15 of the CGST Act, 2017: value of Taxable Supply
- Section 50 of the CGST Act, 2017: interest on delayed payment of tax
- Schedule I of the CGST Act, 2017: activities to be treated as supply even if made without consideration
- Rule 36 of the CGST Rules, 2017: documentary requirements and conditions for claiming input tax credit
- Rule 37A of the CGST Rules, 2017: reversal of input tax credit in the case of non-payment of tax by the supplier and re-availment thereof
References
- Central Board of Indirect Taxes and Customs. "Rule 37. Reversal of input tax credit in the case of non-payment of consideration". Central Goods and Services Tax Rules, 2017, CBIC tax information portal, with amendment footnotes 1 to 5. Retrieved 17 September 2026.
- Notification No. 19/2022-Central Tax, dated 28 September 2022: Seeks to make amendments (Second Amendment, 2022) to the CGST Rules, 2017. Cited in CBIC footnotes 1 and 2.
- Notification No. 26/2022-Central Tax, dated 26 December 2022: Seeks to make fifth amendment (2022) to CGST Rules. Cited in CBIC footnotes 3, 4 and 5.
External links
- CGST Rules, 2017, Rule 37 on the CBIC tax information portal