ITC on import of goods

[Rohit K]

Sir,

Is there any time restriction on availment of ITC on import of goods ?

As per section 16(4) input tax credit in respect of any invoice or debit note is not available for supply of goods or services or both after the thirtieth day of November following the end of financial year to which such invoice or debit note pertains or furnishing of the relevant annual return, whichever is earlier.

In one case, a company has taken ITC on imports pertaining to FY 18-19 in the FY 20-21.

Is the company eligible to take Import ITC in the FY 20-21? Please help.

AI Summary

Time limit for input tax credit may not apply to import bills of entry, permitting delayed ITC subject to registration and litigation risk.
The temporal bar in section 16(4) is interpreted as applying to invoices and debit notes, not to bills of entry; therefore import ITC based on bills of entry dated in an earlier financial year can be claimed later if the taxpayer was registered in the earlier year. The Revenue may issue show-cause notices and litigate, but advisers consider the taxpayer to have a strong legal position; taxpayers should weigh risk appetite and quantum before deciding to defend such claims. Legislative clarification remains a possibility.