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;
(b) he has received the goods or services or both.
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[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.]
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[(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 3[section 41 4***], 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 added to his
output tax liability, along with interest thereon, 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 of the amount towards the value of supply of goods or services or both along with tax payable
thereon.
1. The Explanation subs. by Act 31 of 2018, s. 8 (w.e.f. 1-2-2019).
2. Ins. by Act 6 of 2022, s. 100 (w.e.f. 1-10-2022).
3. Subs. by Act 31 of 2018, s. 8, for “section 41” (w.e.f. 1-2-2019).
4. The words, figures and letter “or section 43A” omitted by Act 6 of 2022, s. 100 (w.e.f. 1-10-2022).
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(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 1[thirtieth day of November] following the end of financial
year to which such invoice or 2*** debit note pertains or furnishing of the relevant annual return, whichever
is earlier.
3
[
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.]
