Section Section 16 of CGST Act Eligibility and Conditions for Taking Input Tax Credit
Financial Year: 2017
Section 16 of CGST Act
Eligibility and conditions for taking input tax credit
(1) Every registered person shall,
subject to such conditions and restrictions as may be prescribed
and in the manner specified in section 49,
be entitled to take credit of input tax charged on any
supply of goods or services or both to him
which are used or intended to be used
in the course or furtherance of his business
and the said amount
shall be credited to the electronic credit ledger of such person.
(2) Notwithstanding anything contained in this section,
no registered person shall be entitled to the credit of any input tax in respect of any supply of goods or services or both to him unless:-
(a) he is 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;
(b) he has received the goods or services or both.
Explanation:-
For the purposes of this clause,
it shall be deemed that the
registered person has received the goods
where the goods are delivered by the supplier
to a recipient
or any other person on the direction of such registered person,
whether acting as an agent or otherwise,
before or during movement of goods,
either by way of transfer of documents of title to goods or otherwise;
(Explanation has been Substituted by CGST Amendment Act 2018)
New Explanation
Explanation:-
For the purposes of this clause, it shall be deemed that the registered person has received the goods or, as the case may be, services:-
(i) where the goods are delivered
by the supplier to a recipient or any other person
on the direction of such registered person,
whether acting as an agent or otherwise,
before or during movement of goods,
either by way of transfer of documents of title to goods or otherwise;
(ii) where the services are provided
by the supplier
to any person
on the direction of and on account of such registered person.
(c) subject to the provisions of section 41 or Section 43A
(Substituted by CGST Amendment Act 2018)
the tax charged in respect of such supply has been actually paid to the Government,
either in cash or through utilisation of input tax credit
admissible in respect of the said supply; and
(d) he has furnished the return under section 39
Provided that where the goods against an invoice are received in lots or instalments,
the registered person shall be entitled to take credit
upon receipt of the last lot or instalment
Provided further that where a recipient fails to pay to the supplier of goods or services or both,
other than the supplies on which tax is payable on reverse charge basis,
the amount towards the
value of supply along with tax payable thereon
within a period of one hundred and eighty days
from the date of issue of invoice by the supplier,
an amount equal to the input tax credit availed by the recipient
shall be added to his output tax liability,
along with interest thereon,
in such manner as may be prescribed
Provided also that the recipient
shall be entitled to avail of the credit of input tax
on payment made by him of the amount
towards the value of supply of goods or services or both
along with tax payable thereon.
(3) Where the registered person has claimed depreciation
on the tax component of the cost of capital goods and plant and machinery
under the provisions of the Income-tax Act, 1961,
the input tax credit on the said tax component shall not be allowed.
(4) A registered person
shall not be entitled to take input tax credit in respect of any
invoice or
debit note
for supply of goods or services or both
after the due date of furnishing of the return under section 39
for the month of September
following the end of financial year to which such invoice or invoice relating to such debit note pertains
or furnishing of the relevant annual return,
whichever is earlier
“Provided that the registered person
shall be entitled to take input tax credit after the due date of furnishing of the return under section 39 for the month of September, 2018
till the due date of furnishing of the return under the said section for the month of March, 2019
in respect of any invoice or invoice relating to such debit note for supply of goods or services or both made during the financial year 2017-18,
the details of which have been uploaded by the supplier under sub-section (1) of section 37 till the due date for furnishing the details under sub-section (1) of said section for the month of March, 2019.”.
Inserted by CGST (Second Removal of Difficulties) Order 2018.
Thanks
CA Rahul Gupta