Eligibility of ITC

[Kaustubh Karandikar]

XYZ Ltd. received services in the year 2021 but Tax Invoice against the same received from the supplier in the year 2023 and tax invoice date also of 2023. The supplier had filed the returns and the same invoices are appearing in Return 2B also in the respective month of 2023. Can XYZ avail credit in 2023 for the services received in 2021?

AI Summary

Tax Credit Dispute: Can XYZ Ltd. Claim Credit for 2021 Services with a 2023 Invoice? Section 16(4) vs. Rule 47. XYZ Ltd. received services in 2021 but obtained the tax invoice in 2023, with the invoice dated 2023. The supplier filed returns, and the invoices appeared in Return 2B for 2023. A participant in the discussion pointed out that credit can be availed based on the invoice date per Section 16(4). However, another participant highlighted a potential issue with Rule 47, which mandates issuing invoices within a specific period after service provision. This discrepancy could lead to litigation, as the department might contest the compliance with Section 16(2)(a), despite the recipient's limited jurisdiction over the supplier's compliance.