Input Tax Credit

[Ethirajan Parthasarathy]

1. Section 16(4) Provides for Time Limit regarding Input tax set off.

It is not clear to me whether the time limit Apllies for Input tax “Availment” or Input tax ‘Credit”

[Praveen Nair]

As per Sec 16(4) of the CGST Act, “A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the due date of furnishing of the return under section 39 for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier.”

Meaning:

In this section it is specified that, if any ITC of a tax invoice remains unclaimed by the taxpayer for the FY 17-18, he can claim that ITC

a. Before the due date of filing the return for September 2018 of the FY 18-19 i.e., 20th October 2018. Or

b. Before the filing of the relevant annual return i.e., 31st December 2018, whichever is earlier.

Example:

· If a taxpayer forgets to claim ITC in relation to a purchase invoice dated 23rd Dec 2017, then in such case he can claim ITC in relation to this invoice, any time before filing of the annual return or filing any return on or before the return of September 2018 in GSTR3B (Return dated 20th Oct 2018). It is to be noted that this credit can be claimed in any return but before filing September 2018 return, as Annual return is not yet made available.

· If the unclaimed ITC for the period July, 2017 to March, 2018 has not been claimed by the taxpayer upto filing of the return of September 2018, then it would lapse i.e., to say cannot be claimed . After the return of September, 2018 has been filed, the taxpayer would not be able to claim this ITC in any of the return filed afterwards.

[DR.MARIAPPAN GOVINDARAJAN]

Yes. There is time limit to take input tax credit. One year from the date of invoice.

AI Summary

Input tax credit time limit: claim ITC before the annual-return deadline or the September return due date to preserve credit. Section 16(4) restricts entitlement to take input tax credit to the earlier of the due date for furnishing the section 39 return for the month of September following the end of the financial year to which the invoice pertains or the furnishing of the relevant annual return; unclaimed ITC after that cutoff lapses and cannot thereafter be taken.