Eligibility of ITC

[Kaustubh Karandikar]

On the GST Portal in Return GSTR-2B of October'23 reflected the party Debit Note and bill dated 31-03-2023. We received soft copy of the debit note Rs. 35,000/- Plus GGST 3,150/- & SGST 3,150/- for accounts entry on dated 23-11-2023. Can we avail Input Tax Credit of the same in the GSTR-3B return for the month of November 2023?

[Madhusudan Mishra]

If it is reflected in 2B of Oct TP then claim it in the 3B of Oct itself.

[Amit Agrawal]

As per Section 16(2)(a), tax-payer should be in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying documents as may be prescribed, before taking ITC.

As tax-payer got possession of debit-note in Nov, 23 and entered the same in books of accounts of Nov, 23, he should take ITC against such debit-note in November, 23 only.

If tax-payer is following Circular No. 170/02/2022-GST, then, such ITC will be shown while filing Table 4(A)(5) of Form GSTR-3B of October, 23, while simultaneously reversing the same under 4(B)(2) (i.e. others) and then, reclaim such ITC while filing GSTR-3B for the month of November, 23.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[Amit Agrawal]

Kindly note that time restrictions u/s 16(4) against a debit note starts with date of such debit note and NOT with reference to date of original invoice.

And my earlier post presumes that original invoice was dated 31.03.2023 while debit-note is dated Oct, 23 which is received by the tax-payer on 23.11.2023.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[Padmanathan KV]

Dear querist,

What is the date of debit note?

AI Summary

Input Tax Credit timing: possession of debit note determines claim month; reversal then reclaim permitted under circular mechanism.
Possession requirement requires a taxpayer to hold the tax invoice or debit note before claiming ITC, so receipt in November makes November the appropriate month for claiming ITC. Where the debit note appears in an earlier month's GSTR 2B, a taxpayer may report the ITC in that earlier month's GSTR 3B and simultaneously reverse it, then reclaim the ITC when possession is taken. Time bar for debit notes runs from the debit note date, not the original invoice date.