Availment of input tax credit Section 41

Input tax credit entitlement requires prescribed documentary and payment conditions; credit must be reversed if supplier fails to pay tax.

Entitlement to input tax credit is available to registered persons using supplies in the course of business, subject to possession of a tax invoice or debit note, receipt of goods or services, actual payment of the tax to the Government (in cash or via admissible credit), filing the prescribed return, exclusion where depreciation was claimed on the tax component of capital goods, and a time limit for claiming credit. Eligible input tax may be self assessed in the return and credited to the electronic credit ledger, but credit must be reversed with interest where the supplier has not paid the tax; re availment is possible if the supplier later pays.