Section 16. Eligibility and
conditions for taking input tax credit.-
(1) Every registered person
shall, subject to such conditions and restrictions as may be prescribed and in
the manner specified in section 49, be entitled to take credit of input tax
charged on any supply of goods or services or both to him which are used or intended
to be used in the course or furtherance of his business and the said amount
shall be credited to the electronic credit ledger of such person.
(2) Notwithstanding anything
contained in this section, no registered person shall be entitled to the credit
of any input tax in respect of any supply of goods or services or both to him
unless,-
(a) he is in possession of a
tax invoice or debit note issued by a supplier registered under this Act, or
such other tax paying documents as may be prescribed;
1[(aa) the details of the
invoice or debit note referred to in clause (a) has been furnished by the
supplier in the statement of outward supplies and such details have been
communicated to the recipient of such invoice or debit note in the manner
specified under section 37;]
(b) he has received the goods
or services or both.
2[Explanation.- For the
purposes of this clause, it shall be deemed that the registered person has
received the goods or, as the case may be, services-
(i) where the goods are
delivered by the supplier to a recipient or any other person on the direction
of such registered person, whether acting as an agent or otherwise, before or
during movement of goods, either by way of transfer of documents of title to
goods or otherwise;
(ii) where the services are
provided by the supplier to any person on the direction of and on account of
such registered person;]
3[(ba) the details of input
tax credit in respect of the said supply communicated to such registered person
under section 38 has not been restricted;]
(c) subject to the provisions
of 4[section 41 5[***]], the tax charged in respect of such supply has been
actually paid to the Government, either in cash or through utilisation of input
tax credit admissible in respect of the said supply; and
(d) he has furnished the
return under section 39:
Provided that where the goods
against an invoice are received in lots or instalments, the registered person
shall be entitled to take credit upon receipt of the last lot or instalment:
Provided further that where a
recipient fails to pay to the supplier of goods or services or both, other than
the supplies on which tax is payable on reverse charge basis, the amount
towards the value of supply along with tax payable thereon within a period of
one hundred and eighty days from the date of issue of invoice by the supplier,
an amount equal to the input tax credit availed by the recipient shall be
9[paid by him along with interest payable under section 50], in such manner as
may be prescribed:
Provided also that the
recipient shall be entitled to avail of the credit of input tax on payment made
by him 10[to the supplier] of the amount towards the value of supply of goods
or services or both along with tax payable thereon.
(3) Where the registered
person has claimed depreciation on the tax component of the cost of capital
goods and plant and machinery under the provisions of the Income tax Act, 1961
(43 of 1961), the input tax credit on the said tax component shall not be
allowed.
(4) 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 6[thirtieth day of
November] following the end of financial year to which such invoice or 7[****]
debit note pertains or furnishing of the relevant annual return, whichever is
earlier.
8[Provided that the
registered person shall be entitled to take input tax credit after the due date
of furnishing of the return under section 39 for the month of September, 2018
till the due date of furnishing of the return under the said section for the
month of March, 2019 in respect of any invoice or invoice relating to such
debit note for supply of goods or services or both made during the financial
year 2017-18, the details of which have been uploaded by the supplier under
sub-section (1) of section 37 till the due date for furnishing the details
under sub-section (1) of said section for the month of March, 2019.]
