Two files that never met
Open your unpaid-invoice list beside your ITC working. Find a supplier whose credit was claimed but whose bill still carries an open balance. That is the starting point for the 180-day ITC check. Not a new OCR run. Not a fresh download of 2B. A comparison between the invoice and what happened to its payment.
I would start here because an ageing report alone cannot answer the tax question. A supplier balance can contain this month's bill, an older credit note and an advance nobody allocated. The balance is real. The story you tell about one invoice may not be.
The CGST Act's Section 16 includes a payment condition: broadly, failure to pay the supplier the value plus tax within 180 days of the invoice can require a credit adjustment. Rule 37 sets out the treatment. Exceptions and amendments matter, so the review below is a working file for your CA, not a return-filing instruction.
The 180-day ITC payment check links credit already availed to settlement of the corresponding supplier invoice. It is different from checking whether the invoice appears in GSTR-2B. AP supplies dated payment and adjustment evidence; the tax reviewer decides whether reversal, interest or later re-availment applies under the current rules.
Do not confuse this with the Section 16(4) claim deadline. That asks whether credit can be taken within its statutory time limit. This asks what a payment history means for credit already taken. One date column cannot safely stand in for both.
Follow one invoice, not one balance
Use a fictional bill for ₹1,00,000 plus ₹18,000 tax, total ₹1,18,000. Your working records an ITC claim. The supplier receives ₹60,000 against that bill; a second payment has not happened. The example is deliberately simple. It is not a calculation of the reversal you should file.
An accounts clerk can establish the original amount, the actual allocation of ₹60,000 and the remaining ₹58,000. The tax reviewer then checks how the current rule applies to that partial settlement, including the value-and-tax allocation. I would not let a spreadsheet choose that treatment merely because dividing the numbers is easy.
An allocation is evidence. An unexplained supplier-level debit is not an invoice settlement.
Now make the example awkward. The bank entry says ₹60,000, but the remittance advice allocates it across two invoices. Keep the advice. Without it, your payment column is a guess wearing a bank reference.
An advance needs the same care. It may eventually settle this invoice, or it may remain unapplied while the invoice ages. Record the allocation that actually happened. Do not backdate it to improve the colour of the ageing report.
Credit notes, withholding and disputed deductions also need separate descriptions. A payment less than the invoice total does not tell you, by itself, whether the difference is an agreed settlement, a tax deduction or an unresolved supplier claim. Let the reviewer see the documents rather than compressing them into “paid.”
Build the review file
Keep one row per invoice, with a stable supplier identity and the invoice number exactly as printed. Include the invoice date, value and tax separately, claim period where known, and each settlement reference. If you cannot establish when credit was availed, leave that question open rather than filling the invoice month by habit.
Add the date on which the report was prepared. An open balance on last month's report may be settled today. A reviewer should not have to reconstruct which version of the payment ledger your spreadsheet described.
The exceptions column earns its place. Write “₹60,000 allocated across bills A and B; advice attached” rather than “part paid.” Write the disputed amount and the document explaining it. A useful note lets someone else reach the same evidence without calling the person who typed it.
| Working field | Evidence to retain |
|---|---|
| Invoice and claim | Original bill; claim working and period |
| Payment allocation | Bank reference and remittance advice |
| Adjustment or dispute | Credit note, correspondence and approval |
| Tax review outcome | Review date, treatment and supporting rule |
This is an extension of a purchase register, not a replacement for the ledger. Your books record the transactions. This file makes the relationship between a claim and its settlement visible.
Leave tax action pending until reviewed. A coloured cell saying “reverse” can quietly turn an AP exception into a filing instruction. If you use a due-date formula, label it as a review trigger and have the relevant convention checked. The formula does not know the exceptions to the law.
After the review, retain what was actually done and in which period. If a supplier is eventually paid, the current law provides a route to re-avail credit subject to its conditions. That next action should be traceable to the earlier adjustment, not treated as a fresh invoice arriving a second time.
Close the payment loop, not just the row
Before each filing review, give the CA the invoice-linked list with its evidence. Work the oldest unresolved allocations first. Ask purchase to settle disputes and treasury to identify remittances. AP should not invent a commercial agreement to close a tax exception.
Do not let a later payment erase the history. Keep the earlier report and the review decision, then add the new settlement. Someone looking back needs to understand why the tax working changed, even when the supplier account now shows zero.
EntryLedger can help produce the invoice side: extracted fields, checks and human review where needed. It does not see your bank allocations, run this ageing calculation or decide an ITC reversal. Passing the document validation gate is not a certificate that every payment condition is met.
The distinction is useful, not disappointing. It tells you which person owns the next action. A blurry date belongs in document review. An unapplied remittance belongs with accounts. The return treatment belongs with the tax reviewer, using the current rules and amendments.
Keep the original bill attached to the settlement story. When the CA asks about an unpaid invoice, send that story. A supplier's closing balance is not an answer to an invoice-level question.
AP records guide, not personalised tax or legal advice. Official source wording checked on 12 October 2026. Have your CA or responsible adviser apply the effective law to your facts before a statutory payment decision or return adjustment.
- CBICCGST Act: Section 16
Payment condition, exceptions and re-availment. Check amendments applicable to the period.
- CBICGST rules
Rule 37 and its amendments govern the implementation. This article is an AP working-file guide.
- GST portalOfficial return user guides
Portal procedures are separate from invoice extraction and payment allocation.
Does an invoice in 2B settle the 180-day payment check?+
No. GSTR-2B and supplier payment are different evidence. AP needs to link the invoice to its actual settlements and adjustments. The tax reviewer checks the current payment condition and exceptions; portal appearance alone does not establish that the supplier was paid.
What if the supplier was only partly paid?+
Retain the invoice value and tax, the allocated payment and the unpaid balance. Ask the reviewer to apply the current Rule 37 treatment to that evidence. Do not treat the bill as fully settled or use an unreviewed percentage formula as a filing instruction.
Can ITC be re-availed after later payment?+
The law provides for re-availment after payment subject to its conditions. Keep the later settlement linked to the earlier adjustment and have the period and treatment reviewed. Do not enter the original purchase invoice again merely to recreate the credit.
Does EntryLedger maintain this payment tracker?+
No. EntryLedger extracts and validates invoice information. It does not maintain supplier payment allocations, decide reversals or file returns. The tracker described here is a working practice you can use beside your ledger and tax working.