ITC availed after time limit prescribed as per section 16(4)

[vaibhav agrawal]

GSTR 3B for the FY 2020-21 was filed on 31 March 2022. Now department is raising concern over availment of ITC as the same has been availed beyond time prescribed in section 16(4) and 16(5). Guidance required regarding fight with the department over the said issue.

[YAGAY and SUN]

The department's contention hinges on Section 16(4) of the CGST Act, which mandates that ITC for any invoice or debit note must be availed before the due date of filing GSTR-3B for September of the following financial year or the date of filing the annual return, whichever is earlier. For FY 2020-21, this deadline was extended due to the pandemic and ultimately fixed as 30 November 2021. If ITC was claimed in GSTR-3B filed on 31 March 2022, it technically falls outside the prescribed timeline.

To counter the department’s objection, one can argue based on principles of substantial compliance and absence of revenue loss, especially if the supplier has paid the tax and transactions are genuine and reflected in GSTR-2A/2B. Judicial precedents have, in some instances, favored taxpayers on such grounds. Also, if there was ambiguity or notification-based extension, the same should be cited. A detailed representation with evidence of eligibility, matching entries, and bona fide intent should be submitted to contest the disallowance.

[KASTURI SETHI]

In my view, chances are bleak.

[Sadanand Bulbule]

Considering the strict legal position of Section 16[4] & 16 [5], the authorities are not "royal" to extend the benefits of ITC beyond the statutory time frame fixed. They are also bound by the same time frame and answerable to the law. Even the CAG would not approve such action of the authorities.

[KASTURI SETHI]

Hon'ble Supreme Court is very strict regarding adherence to time frame  laid down in the GST Acts. One has to be pro-active in one's own interest.

[YAGAY and SUN]

Please refer our inputs as mentioned above specifically "Also, if there was ambiguity or notification-based extension, the same should be cited".

AI Summary

Time bar for Input Tax Credit: late claims risk denial, but may be contested with supplier payment proof and matching returns.
Claims for Input Tax Credit filed after the prescribed filing deadline are technically time barred and liable to disallowance; defenses should centre on documentary proof that the supplier paid the tax, matching entries in returns, evidence of genuine transactions, and any notification based or administrative extensions creating ambiguity, presented in a detailed representation to contest the disallowance.