EXAMPLE

 

 XYZ Limited a manufacturer has the following detail of inputs received in the factory on which credits were not availed earlier. This input is used for supply of goods in September 2018.

 

Determine whether the input credit available in both the following cases

           

Case

 

Particular

GST paid (Rs)

Date of invoice

Date of Annual  Return

Date of Sep 2018 Return

(1)

Raw material

10,000

18th August 2017

28th October 2018

20th Oct, 2018

(2)

Raw material

10,000

18th August 2017

30th August 2018

20th Oct, 2018

.


ANSWER

Section 16(4) provides the time limit for taking input tax credit. Input tax credit of any invoice or debit note for supply of goods or services can be claimed at the earliest of the following:

 

(a)    Filling of the return under section 39 for the month of September following the end of financial year to which such invoice or such debit note pertains or

(b)    Filling of the relevant annual return for such financial year

 

Note - This provision of time limit is only for availment of credit and not for utilization of credit.

 

Case 1. In view of above provision as date of September return is earlier than the date of annual return i.e. 20th Oct, 2018. Thus, ITC on the invoice must be availed on or before said date.

Hence credit can be availed in the month of September.

 

Case 2

 

In view of above provision as date of annual return is earlier than the date of September month return i.e. 30th August 2018. Thus, ITC on the invoice must be availed on or before said date.

Hence credit cannot be  availed in the month of September.