Retrospective extension of input tax credit time limit prevents denial based only on the earlier GST cut-off date.

Input tax credit denied solely for availing credit after the earlier cut-off under section 16(4) of the Central Goods and Services Tax Act, 2017 could not be sustained where a subsequent retrospective amendment, effective from 01.07.2017, and a clarificatory notification and circular extended the time limit in covered cases. The Sikkim HC noted that Notification No. 17/2024-Central Tax and Circular No. 237/31/2024-GST clarified the retrospective operation of the newly inserted sub-sections of section 16. On that basis, the prior denial of credit was no longer maintainable and the impugned demand order was set aside.

---

---

Issues: Whether input tax credit denied on the ground of delayed availment beyond the cut-off date under section 16(4) of the Central Goods and Services Tax Act, 2017 could be granted in view of the subsequent retrospective amendment and the clarificatory notification and circular.

Analysis: The demand was founded on the view that the assessee had availed input tax credit after the statutory time limit. The respondents placed on record Notification No. 17/2024-Central Tax dated 27.09.2024 and Circular No. 237/31/2024-GST dated 15.10.2024, which clarified that the newly inserted sub-sections of section 16 of the Central Goods and Services Tax Act, 2017 operated retrospectively from 01.07.2017 and extended the time limit for availment of credit in specified cases. In light of that stand, the earlier denial of credit no longer survived.

Conclusion: The assessee was held entitled to the input tax credit earlier denied, and the impugned demand order was set aside.

Ratio Decidendi: Where a statutory time limit for availment of input tax credit is retrospectively extended by amendment and clarified by the competent tax authorities, a denial based solely on the earlier cut-off date cannot be sustained in the covered cases.

---