🇮🇳India

ITC दावा विलंब और नकद प्रवाह ड्रैग (ITC Claim Delays & Cash Flow Drag)

Updated: Feb 20262 verified sources

Definition

GST ITC claim process: (1) Invoice received from PEO/EOR vendor (18% GST); (2) Firm pays invoice + 18% GST; (3) Vendor files GSTR-1; (4) Firm receives GSTR-2B from GST system (15–20 days later); (5) If invoice is flagged (missing GSTIN, mismatched amount), firm must wait for vendor to correct invoice and re-file; (6) Manual flagged invoice tracking, vendor follow-up, and amendment cycle: 10–30 days. Total ITC claim delay: 30–40 days. During this period, firm has paid GST but cannot offset against output tax liability, creating negative working capital drag. For ₹5 crore annual staffing spend @ 18% GST = ₹90 lakh GST, a 30-day delay = ₹90 lakh tied up for 1 month.

Key Findings

Financial Impact: Cash tied up: (Annual staffing spend × 18% GST × 30–40 days) / 365. Example: ₹5 crore spend = ₹90 lakh GST × 35 days = ₹8.6 lakh cash flow drag per cycle. Annualized over 4 cycles = ₹34.4 lakh working capital inefficiency.
Frequency: Monthly GSTR-2B reconciliation; ITC claim cycles: 4 per financial year (quarterly).
Root Cause: e-invoicing mandate creates GSTR-2B flagged invoices due to vendor timing/data entry errors. Manual flagged invoice resolution consumes 20–40 hours per month, delaying ITC claims and extending cash conversion cycle.

Why This Matters

The Pitch: Offshoring consulting firms with ₹5 crore annual staffing spend face 20–40 day cash recovery delays due to manual GSTR-2B flagged invoice resolution. Automation of flagged invoice triage and vendor follow-up reduces ITC claim cycle from 30–40 days to 5–7 days, improving cash conversion by ₹25,00,000–₹50,00,000 working capital recovery.

Affected Stakeholders

GST Compliance Officer, Accounts Receivable/Payable Specialist, Finance Manager, Treasury/Cash Flow Analyst

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Financial Impact

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Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Related Business Risks

अपर्याप्त PEO/EOR कंट्रैक्ट स्पष्टता और नियामक देयता (Inadequate PEO/EOR Contract Clarity & Regulatory Liability)

₹2,00,000–₹10,00,000 per engagement; typical back-pay + penalty scenario: EPFO 24% penalty on ₹50,00,000 batch payroll = ₹12,00,000. TDS default: 10% of service invoice uncovered = ₹1,00,000–₹5,00,000. Reverse charge penalty: 50% of GST due = ₹50,000–₹2,00,000.

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