One of the main objects of GST Law is to avoid the cascading effect of taxes and to ensure seamless flow of credits whereas GST Law includes provisions, restricts admissibility of ITC of goods and/or services. Section 16(1) of the Central Goods and Services Tax, 2017 (CGST Act, 2017) provides provision regarding availment of credit to a registered person subject to conditions and restrictions as may be prescribed. There are several conditions such as possession of invoice, receipt of goods or services etc. Availing ITC under GST is time bound and the relevant provision in this regard is provided under Section 16(4) of the CGST Act, 2017.
Under this Article, we will try to explore the time limit for availment of credit. But it is also important to know that the prime concept of ITC arises under GST by Section 41 of the CGST Act, 2017 by the golden sentence ‘entitled to take eligible input put credit’.
Section 41– Claim of Input Tax Credit and provisional acceptance thereof.
“(1) Every registered person shall, subject to such conditions and restrictions as may be prescribed be entitled to take the credit of eligible input tax, as self-assessed, in his return and such amount shall be credited on a provisional basis to his Electronic Credit Ledger.
(2) The credit referred to in sub-section (1) shall be utilised only for payment of self-assessed output tax as per return referred to in the said sub-section.”
While analysing the sentence ‘entitled to take eligible input tax credit’, it is necessary to refer sub section (1) of Section 41 and sub section (1) of the Section 16 of the CGST, 2017 and both the sections begin as follows “Every registered person shall subject to conditions and restrictions as may be prescribed”
Therefore, if any person wants to take ITC, he should be, first, registered with authority under GST Law. As soon as the registered person take his eligible ITC in his return the credit will be available in the Electronic Credit Ledger (‘ECL’), his claim is provisionally accepted, subject to matching, mis-matching elements with the supplier report in his form GSTR-1.
Maximum time limit to avail Input Tax Credit (“ITC”) under GST Law.
According to Section 16(4) of the CGST Act, 2017, a registered person is eligible to take input tax credit with respect to the invoice or debit note for inward supply of goods and/ or services, earlier of the due date for filing of Form GSTR 3B for the month of September for subsequent year or filing of annual return for the period to which such invoice or debit note pertains to.
Section 16(4) of the CGST Act, 2017 may be read as under-
“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.”
As per Section 16(4) of the CGST Act, 2017 the last date to avail ITC for the invoices of a particular financial year would be the due date of filing of return under Section 39 of the CGST Act, 2017 for the month of September following the end of the relevant financial year or Annual Return u/s 44 of the CGST Act, 2017 for the relevant financial year, whichever is earlier.
It is also submitted that there are two important provisions which should be considered regarding maximum time limit to avail ITC, first provision is Section 39 of the CGST Act, 2017 and second one is Section 44 of the CGST, Act, 2017.
The relevant provisions of both Sections and rules related thereto read as under-
Section 39. Furnishing of returns.
“(1) Every registered person, other than an Input Service Distributor or a non-resident taxable person or a person paying tax under the provisions of Section 10 or section 51 or section 52 shall, for every calendar month or part thereof, furnish, a return, electronically, of inward and outward supplies of goods or services or both, input tax credit availed, tax payable, tax paid and such other particulars, in such form and manner, and within such time, as may be prescribed.”
Rule 61. Form and manner of submission of monthly return.
“(1) Every registered person other than a person referred to in Section 44 of the Integrated Goods and Service Tax Act, 2017 or an Input Service Distributor or a non-resident taxable person or a person paying tax under section 10 or section 51 or, as the case may be, under section 52 shall furnish a return specified under sub-section (1) of section 39 in FORM GSTR 3 electronically through the common portal either directly or through a Facilitation Centre notified by the Commissioner.”
Section 44. Annual return.
(1) Every registered person, other than an Input Service Distributor, a person paying tax under section 51 or section 52, a causal taxable person and a non-resident taxable person, shall furnish an annual return for every financial year electronically in such form and manner as may be prescribed on or before the thirty first day of December following the end of such financial year.”
Rule 80. Annual return.
“(1) Every registered person, other than an Input Service Distributor, a person paying tax under section 51 or section 52, a causal taxable person and a non-resident taxable person, shall furnish an annual return as specified under sub-section (1) of section 44 electronically in FORM GSTR-9 through the common portal either directly or through a Facilitation Centre notified by the Commissioner.”
By reading the above relevant sections and rules relating thereto, the maximum time period to file ‘Annual Return’ is specified under Section 44 of the CGST Act, 2017 which is 31st Day of December from the end of the financial year and requisite form to file Annual Return is specified by Rule 80 of the CGST Rules, 2017 which is FORM GSTR 9. It is also submitted that the Government has extended the due date for furnishing the Annual Return under Section 44 of the CGST Act, 2017 for the financial year 2019-20 from 31st December, 2020 to 28th February, 2021.
Further, in case of return under Section 39 of the CGST Act, 2017, FORM GSTR 3 is specified in Rule 61 of the CGST Act, 2017 but no time period is specified to file this form i.e. FORM GSTR 3 whether in Section 39 or Rule 61. Moreover, it is also important to note that the return in FORM GSTR 3 continued to be deferred due to technical glitches right from its introduction and is still suspended. It is further submitted that amended Rule 61(5) of the CGST Rules, 2017 provides that-
“where the time limit for furnishing of details in Form GSTR-1 under section 37 or in Form GSTR-2 under section 38 has been extended, the return specified in sub-section (1) of Section 39 shall, in such manner and subject to such conditions as the Commissioner, may, by notification, specify, be furnished in in Form GSTR-3B, electronically through common porta, either directly or through a Facilitation Centre notified by the Commissioner.”
Provided that where a return in Form GSTR-3B is required to be furnished by a person referred to in sub-rue (1) then such person shall not be required to furnish the return in Form GSTR-3.”
It is stated that in exercise of the powers conferred by Section 168 of the CGST Act, 2017, read with sub-rule (5) of rule 61 of the CGST Rules, 2017 the Commissioner, vide Notification No.29/2020-Central Tax, dated 23.03.2020, specified that the return in Form GSTR-3B for each of the months from April, 2020 to September, 2020 shall be furnished electronically through the common portal, on or before the 20th day of the month succeeding such month. The due dates for filing of Form GSTR-3B returns for tax period of September, 2020, are as given below:
|Sr. No.||Taxpayers with aggregate turn over (PAN based) in the previous financial year||Taxpayers having principal place of business in the State/ UT of||Due date of filing of Form GSTR 3B, for September, 2020|
|1||More than Rs 5 Crore||All States and UTs||20th October, 2020|
|2||Upto Rs 5 Crore||State of Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana or Andhra Pradesh or the Union territories of Daman and Diu and Dadra and Nagar Haveli, Puducherry, Andaman and Nicobar Islands and Lakshadweep||22nd October, 2020|
|3||Upto Rs 5 Crore||State of Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand or Odisha or the Union territories of Jammu and Kashmir, Ladakh, Chandigarh and Delhi||24th October, 2020|
Remarks: In the back ground of above, it is submitted that maximum time limit for availing ITC in respect of invoice pertaining to Financial Year 2019-20 and/or Debit Note of invoices pertaining to Financial Year 2019-20 is earlier of
1. Due date for filing of GSTR-3B returns for tax period of September, 2020, i.e. 20th October, 2020; or
2. Due date of Annual Return (FORM GSTR-9) under Section 44 i.e. 28th February, 2021
Disclaimer: Nothing contained in this document is to be construed as a legal opinion or view of either of the authors whatsoever and the content is to be used strictly for educative purposes only.