Interest on reversal on non payment to vendors within 180days

[DAMINI TALWAR]

We have received an inward supply invoice in April 2022, but we could not make payment to the vendor within 180 days neither we have reversed the ITC on non payment within time limit.

However payment is made to vendors after 250 days of issue of invoice.

Interest should be calculated from which date to which date. Pls give section and rule reference for the same.

AI Summary

Interest on unreversed input tax credit accrues after the 180 day reversal deadline until payment or reversal is effected.
Where a recipient fails to pay a supplier within 180 days after availing input tax credit, the statutory framework requires reversal or payment of an amount equal to that ITC; recent amendments removed prior rule text that explicitly fixed interest timing and calculation, producing uncertainty whether the general interest provision for delayed tax payment applies. One view treats interest as accruing from the end of the 180 day period until the month before payment or reversal, while an alternative view contends that reversal is not equivalent to failure to pay tax and therefore the general interest provision does not apply.