Time limit for clsiming ITC, Goods and Services Tax - GST

[KARAN VERMA]

Sir, I have received one service invoice dated 25/03/2020. But services against such invoice completed on 15/05/2020.

Now, my question is what is last date for me to claim ITC - 1. September, 2020 or 2. September, 2021.

Whether Section 16(2) over-ride Section 16(4) for time limit for availing ITC w.r.t condition for receipt of goods or services.

Posts / Replies

[Punit Agarwal]

Last date to claim ITC for the Invoice stands till the due date of Filling return u/s 39 of CGST Act for the month of Sep 2020.

[Punit Agarwal]

In my View:-

Both the Section are Negative Statement i.e. 16(2) and 16(4) which starts with "No registered person will be entitled to the Credit". So it doesn't actually over-rides but creates an extra condition i.e. The Goods must be received and Input needs to be taken before the time prescribed.

There will be practical difficulty say for Instance you have done a AMC on 30th March 2021 for 1 Year and the Bill was raised on 30th March 2021.

Now, Your are not fully eligible for credit as the services are not fully received till the due date u/s 39 for the Sep 2021.

In this case you need to Fully Claim the credit in the month of March 2021 and reverse the same amount under "All other Reversal". and then take proportionate credit on monthly basis. As there is no time limit prescribed to reclaim the claimed credit.

[KASTURI SETHI]

I agree with both views of Sh. Punit Agarwal to a T.. Nicely explained. Reply well drafted.

[Rajagopalan Ranganathan]

Sir,

My views are as under. Since you have received the service on 15.5.2020, you can take the itc only on or after 1.5.2020, the date of receipt of service by you. The last date for taking credit is 20.10.2021 being the last date for filing the return pertaining to September 2021. However since the invoice is issued on 25.3.3030 it would have been reflected in GSTR-2B or 2A for the month of march 2020 available in the portal on or after 11.4.2020 but you can take the credit on or after 15.5.2020 the date of receipt of service vide Section 16 (2) (b) of CGST Act, 2017.

[KARAN VERMA]

Thank you Sir.

It means in this case Section 16(2)(b) over ride Section 16(4).

And last date to claim ITC for service received in May-2020 is September, 2021 irrespective of fact that invoice issued in March-2020.

[ABHISHEK TRIPATHI]

In short,

Invoice date – 25.03.2020

Service received date – 15.05.2020

Your query is whether the last date should be from the date of invoice or the date of service received (S. 16(2)(b)?

See, Sec. 16(2) is a condition precedent for the entitlement for ITC and Sec. 16(4) provides you with the upper time limit for claiming ITC. Sec. 16(4) has provided the upper time limit w.r.t. “invoice”, hence whatever be the situation when the invoice is raised on 25.03.2020 then in accordance with Sec. 16(4), the last day will be Sep 2020. There isn't a question of overriding any provision.

Food for thought:

Technically, in cases like yours, the ITC should be claimed only after the service is received i.e., after 15.05.2020, but the registered person claims the ITC just after receiving invoices. [Another issue]

For the sake of discussion, I think Sec. 16(2) starts with a non-obstante clause, thereby overriding the other provisions if needed. However, that is not the case here.

[KASTURI SETHI]

Section 16(2) does not over-ride Section 16(4). So compute the last date of taking ITC from the date of invoice. Normally invoice is issued after completion of service except continuous supply.

[Shilpi Jain]

As per 16(4) the time limit for ITC is linked with invoice date. So in your case sep 20 would be the due date...

Another angle to this... as per the time of supply provisions.. in the explanation it is mentioned that the supply is deemed to have been made to the extent the invoice is issued or the advance paid... can this mean that the service is also deemed to be received in that case? Implying that credit can be taken based on the invoice issued...

Why i have brought this proposition is , in case of an AMC entered in March... invoice issued in March for entire year... but if we say credit has to be taken month on month then no credit will be eligible for services received from October to February...

[ABHISHEK TRIPATHI]

Dear Ma'am,

Excellent observation.

Invoice raised in March for next FY AMC - In that situation you're right, the registered person may avail the entire ITC to the extent of invoice raised. Impediment of S. 16(2)(b) will get resolved by the explanation to the Sec. 12 and 13. If the supply is 'deemed to have been made' then its obvious that it is 'received also'.

The interpretation to avail ITC to the extent of invoice is based on deeming provision, however, what if the other side argues that S. 16(2)(b) contemplates actual receiving of goods or services?

Btw thank you, your reply was extremely thought provoking.

[Ganeshan Kalyani]

These problems in GST enables the professional to survive. If the law is clear the the taxpayer himself would have done the compliance. I am writing this on a lighter side.