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      Question

      Under Section 16(2) of the CGST Act, what happens if a

      recipient fails to pay the supplier within 180 days from the invoice date?
      A ITC remains unaffected Correct Answer Incorrect Answer
      B ITC must be reversed along with interest Correct Answer Incorrect Answer
      C Only tax amount is reversed without interest Correct Answer Incorrect Answer
      D Supplier must reverse output tax Correct Answer Incorrect Answer

      Solution

      Explanation: Under GST law (Section 16(2) of the CGST Act & Rule 37), if a recipient fails to pay the supplier for goods/services (value + tax) within  180 days  from the invoice date, they must reverse the availed (ITC) along with interest.

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