Articles explains Conditions to avail Input tax credit under GST, Important Points related to Input tax credit under GST, Input Tax Credit if Depreciation been claimed on Tax Amount, Due Date for Input tax credit under GST and Documents for availing Input tax credit under GST.

Section 16 of CGST Act, 2017 laid down the eligibility and conditions for taking input tax credit, accordingly every registered person is entitled to take input tax credit under GST Law on any supply of goods or services or both which are used or intended to be used in the course or furtherance of his business.  The input tax credit under GST is credited to his electronic credit ledger which he can utilise and adjust against while discharging his outward tax liability.

Conditions to avail Input tax credit under GST

1. The registered person should be in possession of a tax invoice or debit note as issued by the registered supplier, or any other tax paying documents as may be prescribed

2. Receipt of goods or services or both (See Note: 1)

3. Tax has been paid to the Government related to such input tax credit either in cash or through utilisation of input tax credit

4. Furnishing required return as per section 39

Note 1: When the supplier delivers goods to a recipient or any other person on the direction of purchaser, as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to the goods or otherwise, it shall be deemed that the purchaser received the goods.

Important Points related to Input tax credit under GST

1. When the goods are received in lots or instalments against an invoice, the registered person can take input tax credit on receipt of last lot or instalment

2. The recipient should make payment for the value of goods or services or both along with tax to the supplier within 180 days from the date of invoice else the availed input tax credit shall be added to output tax liability along with applicable interest, except for the supplies on which reverse charge mechanism applies

3. The recipient can take input tax credit after making payment to the supplier for the value of goods or services or both along with tax

Input Tax Credit if Depreciation been claimed on Tax Amount

Where the registered person has claimed depreciation on the tax amount of capital goods under the provisions of Income Tax Act, 1961, the input tax credit on the said tax amount shall not be allowed.

Due Date for Input tax credit under GST

The registered person shall not be entitled to take input tax credit in respect of any invoice or debit note after the due date of furnishing return under section 39 for the month of September following the end of financial year to which such invoice or debit note pertains or furnishing the annual return, whichever is earlier.

For example:

Due Date for Input tax credit

Documents for availing Input tax credit under GST

Ae per rule 36 of CGST Rules, the following documents are accepted to avail input tax credit:

1. An invoice issued by the supplier as per the provisions of section 31 of CGST Act

2. An invoice issued as per the provisions of clause (f) of sub-section (3) of section 31 of CGST Act, subject to payment of tax

3. A debit note issued as per the provisions of section 34

4. A bill of entry or similar document prescribed under the Customs Act, 1962

5. An Input service distributor invoice or credit note or any document issued by an Input service distributor as per the provisions of sub-rule (1) of rule 54

Checkout GST Calculation Worksheet Examples Here

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Post Graduate in Commerce having 14+ years of experience in Accounting & Taxation. Contact Email: uday.gstguide@gmail.com View Full Profile

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