One of the main objectives for introduction of GST Act is to avoid the cascading effect of taxes and to ensure seamless flow of credits. The GST law contain provisions which restricts admissibility of input tax credit of goods and/or services. The admissibility including conditions for claim of ITC contained in Section 16 of the CGST Act 2017 includes time limit as well.

Provision under GST: 

In terms of Section 16(4) of CGST Act, a registered person is eligible to take credit with respect to the invoice or debit note for inward supply goods or / and services, earlier of the due date for filing of 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.

Input Tax Credit

Few issues with respect to time limit of ITC

Bill of Entry in case of Imports

In case of imports, IGST will be discharged by filing bill of entry which would be the document to claim ITC of IGST paid on imports. Rule 36 of CGST Rules 2017 prescribes the documentary requirements for claiming the ITC which include the Bill of entry as one of the documents to claim the ITC.

In terms of section 2(66) of CGST Act, ‘tax invoice’ means invoice referred in section 31 of CGST Act. This section mandates issuance of invoice or a bill of supply for every supply of goods or/and service having details of description, quantity, value of supply, tax charged there on and such other particulars as may be prescribed. This section does not give reference to Bill of entry for imports.

It is relevant to note that Section 16(4) does not mention time limit applicable for availing ITC of IGST paid through bill of entry. Bill of entry is not an invoice (or) debit note for which there is a time limit. So, restriction of time limit should not be applicable in case of Bill of Entry.

Inward supply liable to GST under RCM

In terms of Section 2(98) of CGST Act, ‘reverse charge’ means recipient is liable to pay GST on inward supply of goods or/and services as notified by government under section 9(3) or supply from unregistered person under section 9(4) of CGST Act.

In terms of section 31(3)(f) of CGST Act, registered person receiving goods or services from an unregistered person is liable to pay tax under reverse charge u/s 9(3) or u/s 9(4) and issue an invoice instead of supplier.

Section 31(3) starts with notwithstanding clause, where time limit to issue tax invoice within 30 days of provision of service is not applicable in case of inward supply, where recipient is liable to pay tax under reverse charge. Recipient issues self-invoice for payment of tax and to claim credit on such taxes paid, under section 16(2). In such case, recipient cannot be treated as supplier of goods or /and services and restriction on time limit to claim credit on taxes paid u/s 16(4) will not be applicable.

Even if restriction is applied u/s 16(4) for the time limit for availing the ITC, it shall be applicable for the year in which such invoice is raised and not from the date in which provision of inward supply of service, as GST provision does not prescribe issue self-invoice within 30 days for RCM case.

Invoice date and Time of supply

Rule 47 of the CGST Rules prescribes the time limit for issuing the invoice for supply of services which is 30 days from the date of provision of service. Section 13 of CGST Act prescribes the time of supply in case of services which is as follows –

a. In case the invoice has been issued within 30 days from the date of provision of service then the time of supply is earlier of date of invoice or date of receipt of payment.

b. In case the invoice is not issued within 30 days from the date of provision of service, then the time of supply will be earlier of date of provision of service or date of receipt of payment.

Ex:  Date of provision of service – 31/12/2019

Date of issue of invoice – 15/10/2020

Date of receipt of payment – 15/10/2020

In the above case, the time of supply u/s 13 of CGST Act is 31/12/2019 and supplier discharges the GST along with interest applicable. In such case, the question which arise is whether the time limit u/s 16(4) is applicable from the year end in which service provided i.e. 31/03/2020 or from the year end in which the invoice has been issued i.e. 31/03/2021.

In the view of author, the time limit to avail the credit should be considered based on the year to which such invoice pertains and not from the year end in which the service provided.

Tax return u/s 39

Another condition for claiming ITC is to file the return u/ 39 of CGST Act i.e. GSTR 3 which is not yet made applicable due to technical glitches and GSTR 3B has been introduced for time being in leu of GSTR 3 u/r 61(5). In case of “AAP & Company, Chartered Accountants v/s Union of India”, the Gujarat HC held that Form GSTR-3B is not a valid return under section 39 of CGST Act, 2017. However, the department has filed an appeal against the above referred decision in Supreme Court vide Union of India & Others Vs AAP And Co, in (2019-TIOL-543-SC-GST) which is pending as on date.

GSTR 3B has been introduced through CGST Rules, not through the sections. Rules cannot override the provisions of the act. Rules are just procedures to comply with the provision of the act. So, return inserted through rules cannot said to be valid return and which is disputable.

Notification No. 49/2019 CT dated 09/10/2019 has been issued after the decision of Gujarat HC, giving retrospective amendment to Rule 61(5) categorised Form GSTR 3B as a return u/s 39 of CGST Act. Such amendment cannot be held to be retrospective as it deprives the right entitled to the taxpayer. Retrospective amendment cannot undo a right which has already been vested with the tax payer and deny the benefit.

ITC to be allowed even if supplier failed to pay taxes to Government

As per section 16(2) of CGST Act, one of the conditions for claiming the credit by recipient is that the supplier should have actually paid such taxes collected to the government. Presently it is not possible to verify that whether supplier has paid the taxes collected by the recipient. Also there is an option to file the GSTR 3B with-out considering the details in GSTR 2A. Just because the supplier has not been paid the taxes, recipient cannot be denied to take the credit of the taxes paid.

Recently decision has been held in case of Arise India Limited and others Vs. Commissioner of Trade & Taxes, Delhi and others [TS-314-HC-2017(Del)-VAT] – wherein H’ble Supreme Court held that, the ITC shall be allowed to recipient, even though supplier has not paid tax collected from the assessee to the government, which is one of the condition to claim the credit of taxes paid on inward supply of goods or/and services under earlier regime also.

Conclusion:

GST is a new law which is undergoing regular amendments, clarifications and different interpretations. The government and the GST council also being very pro-active in considering the requests of the tax payers. One can hope that the liberal view is adopted in ITC as it is a beneficial provision with limited restriction on claim of ITC.

Special thanks to CA Mahadev R for inputs. The author could be reached at [email protected] for any queries / feedback.

Author Bio

Qualification: CA in Job / Business
Company: N/A
Location: Bangalore, Karnataka, India
Member Since: 15 Apr 2020 | Total Posts: 1

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52 Comments

    1. vijay says:

      NO

      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.”

  1. komal patil says:

    Sir.By mistake one of my colllegue forgotten yo take itc related f.y 2019_20.The amount is huge.overall Rs.30 lakh.As per our CA this unclaimed itc will be credited to electronic credit ledger but can not be claim as refund.we already have huge balance in credit ledger as we are exporters and doing export under lut scheme.wehave already applied for refund upto jan 2020.Sir any solution to get back this 30 lakh.As as per our CA this entire amount is of no use as it becomes time barred now to claim itc.pz suggest solution if any

  2. Lalith says:

    Sir, i a have a doubt, for example i have filed GSTR-3 B return for the month of October, 202 as NIL but i have liability and i dont have ITC. Now the department asked me to pay the liabiity through cash only. But i have received ITC during the current month (February, 21), can i pay the same through ITC.
    If i need to pay through cash only then under what section / rule, department is asking me to pay in cash. Pl explain.

  3. amit tripathi says:

    Dear sir,
    i have to GST no one is in Delhi and on is in Gurgaon of same company. in November 2019 i have take the IGST input in Delhi of Gurgaon bill . what should i do now can i have the pay back or i can correct my mistake.

  4. KAPIL says:

    IN FY 19-20 SOME OF MY SUPPLIER FILED RETURN AFTER OCTOBER 2020 AND SOME AMMEND MY INVOICE. I ALREADY TAKEN ITC OF THESE INVOICES CAN I REVERSED THIS?

  5. GANDLA RAVINDER says:

    Dear sir,
    Previously I put the comment on composition scheme, in that case i have not submitted the annual returns for FY 2019-2020 and 2020- 2021. earlier FY years ITC claim time limit is upto Septermber 2020. In my case ineligibility starts from 19h October 2019, am i eligible for ITC claim from which Financial Year sir

  6. GANDLA RAVINDER says:

    Sir i am composition dealer but i have violated the composition scheme condition that i have supplied inter state on October, 2019. so from there i am ineligible for composition scheme. from there onwards i have to file regular returns for this can i claim input tax credit for the FY 2019-2020 and 2020-2021 please suggest me

  7. NITIN BANSAL says:

    Dear Sir,

    We got a new GST number in Jan 2020. Our Vendors make the invoice on new GST number, but filed GSTR1 on old GST number. As due to covid we didnot check GSTR2A. SO they are now making amendments in Dec 2020 or Jan 2021.
    Can we claim ITC for the period of Jan 2020 to Mar 2020? Or we need to reverse the ITC already Claimed and pay the taxes?

  8. Amit Mistry says:

    Sir, I had raised invoice in Jan 20 and also pay GST, but my that customer was defaulter in payment. Can I claim refund of gst for non receipt of payment.

  9. Dipesh says:

    Sir,
    I have ITC of Ex- UP Purchased in GSTR 2A But Not now show in GSTR 2B. i want to claim ITC in GSTR 3B. Can I claim ITC or not.
    If i have done that what i have to pay penality as per GST Rules or not.
    if i have to pay penality what will be the interest rate.

  10. MOHD RAHIL ALI says:

    R/SIR
    CAN I CLAIM THE ITC OF F.Y. 2017-18 IN F.Y. 2020-21 UPTO THE MONTH OF SEPTEMBER 2020. THE REQUIREMENTS OF SECTION 16(2) ARE SATISFIED BUT THE PROBLEM IS OF SECTION 16(4) REGARDING THE TIME LIMIT. KINDLY GUIDE ME THAT CAN I AVAIL THE ITC OF FY 2017-18 IN F.Y. 2020-21 UPTO THE MONTH OF SEPTEMBER.

  11. Samkit says:

    Is there any time limit to utilise the ITC claimed under the GST regime ie are there any provisions which states that ITC needs to be utilised within a certain time frame say 1 yr or 4 yrs etc..Kindly guide

  12. SUKUMAR says:

    Sir
    I have accounted an invoice dated 31.03.2019 in march 2020 and claimed ITC in my March 2020 3 B and paid the tax amount only in Aug 2020 due to Covid .. The dept has rejected the ITC . What is the solution available to me ???

  13. Ganesh Kumar says:

    Sir can i claim for advance IGST ITC of September month from seller who is not uploaded his Gstr1 in last month. How to get itc of last month totally

  14. shekhar says:

    Sir we need a suggestion , actually we received a Vendor bill of Mar-20 month, which booking and payment we forgot to done before 30-09-2020.

    Bill date is 21-03-2020 and Now we are booking in Oct-20 month and doing payment.

    Sir plz suggest can take this bill ITC claim in our Sep-20 month GSTR3B and make reconciliation statement for Annual Audit .

    Vendor already filled a GSTR1 and showing this invoice.

    It’s request to you Please suggest any solution.

  15. ram says:

    Dear Sir,
    The judgement in
    Arise India Limited and others Vs. Commissioner of Trade & Taxes, Delhi and others
    is relevant for VAT laws, without nexus, how you say it can be applied to GST ITC also

  16. Dhanashri says:

    Hello.
    I m small tax payer.
    1. How to claim itc in sept 3b return if supplier is quarterly filing returns?
    2. Can we claim missing Aug itc in sept 20 return?

  17. puttappa chowshetti says:

    I have not taken input tax credit (IGST) relating April 2019 (uploaded in 2A) now i can take credit in the month of Sept 2020.

  18. Ashok Kumar says:

    Dear Sir,
    can we book GST-ITC in our book of accounts as on 30.09.2020 while doing Liability provisioning in compliance to TDS rules for the services received, but Invoice is not received.

    Does, the GST-ITC can be booked before the date of invoice or not?

  19. Rajendra Jain says:

    Dear sir,
    I had forgotten to claim IGST import of single bill of entry of 2018-19. This came to notice now in 2020 while preparing for annual return of 2018-19. My account says its doubtful to claim but as per what I read and understand you can claim same as it’s not a tax invoice or debit note . Pl suggest as amount of IGST is big Rs 5 lakhs . Thanks in advance

  20. naveen kumar says:

    Sir I am paid igst of buyer another GSTIN Number for fy 2018-19 but invoice not to be amend on gst portal still so please suggest how can amend this invoice in current FY.

  21. Anjali says:

    Dear Sir,

    With new Itc system I am getting confused. With gstr 2a, i am able to view the inputs. i consulted few friends who are CA told me that its can be claimed only for the invoices you able to view in gstr 2a. I filed my own gst return 3b for month of aug today. I think I went wrong somewhere as regular amendments are making it tough for professionals & busimess to cope with understanding. Can you tell me that I only claimed the itc which I was able to view in gstr 2a whereas my purchases were high for Aug, can I claim it in sept return hopefully will be able to view it as the supplier who will filing it quaterly will also file their respective returns.
    And in case If im unable to view few purchases in oct, whats the procedure for self declaration. Ie only figures are to be put in excel or there is any system to it where I can put details regarding the invoices not reflected in gstr 2b
    Thanks in advance

  22. Chaitanya says:

    1. If I want to claim input tax credit on bill of entry beyond due dates of section 16 (4), where do this credit can be shown in GSTR 9 and whether same is allowed in GSTR 9C by GST Auditors.
    Also, could you please quote any reference/notification that BOE can go beyond the due dates of Section 16 (4)
    2. In case of GSTIN is cancelled by the supplier and input credits are not reflecting in GSTR 2A. In this scenario whether department allows input tax credit.

  23. Vinod K says:

    Dear Sir,
    Though the case is pending before the Supreme Court as on date, the Department already started sending notices (ASMT-10) to the dealers for payment of tax to the extent of ITC which have been claimed late.

  24. Kashinath says:

    Dear Sir,

    for the Financial year 2020-21 we received advance during FY 2019-20 whereas GST been discharged and advance received receipt been issued to the party but due to this Covid-19 we are cancelling the scheduled FY 2020-21 event whereas most the customer asking for their advance refund, so we are ready to pay them back and also the GST portion we applied by filing FORM GST RFD-01 under the category “Refund of excess payment of tax” kindly help us to understand do we need to show this refund while we file our monthly return of GSTR-1 and GSTR-3B if yes which return and under which head we need to declare this refund claimed amount kindly advice thanks.

  25. JACOB JOSEPH says:

    I think Section 16(4) need a detailed look. Section 16(4) do not apply time limit for claiming input tax. It is a general rule applicable for claiming input tax related to various years. The legislature intention is that a claim of input tax of a particular year shall not be claimed after September of next of year or filing of annual return which ever occur earlier . The Removal of difficulty Order dated 02.10.2018 is issued as clarification for claim of input tax of such additional invoices or credit notes / debit notes issued subsequently in relation to supplies effected during 2017-2018. Through this order the department permitted claim of input tax on such such additional invoices, credit notes/debit notes upto 31.03.2019. Department using Section 16(4) disallowing claim of input tax citing the reason that the returns are filed for the year 2017-2018 after 31.03.2019 , which in my opinion a wrong interpretation of Section 16(4) and ROD order dated 02.10.2018 .

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