{"id":6521,"date":"2023-12-27T08:58:46","date_gmt":"2023-12-27T08:58:46","guid":{"rendered":"https:\/\/www.caindelhiindia.com\/blog\/?p=6521"},"modified":"2023-12-27T09:47:30","modified_gmt":"2023-12-27T09:47:30","slug":"sec-164-claiming-itc","status":"publish","type":"post","link":"https:\/\/www.caindelhiindia.com\/blog\/sec-164-claiming-itc\/","title":{"rendered":"Section 16(4) eligibility &#038; Conditions for claiming ITC."},"content":{"rendered":"<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-6250\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/09\/Reporting-of-Input-Tax-Credit-Reversal-Opening-Balance..jpeg\" alt=\"Reporting of Input Tax Credit Reversal Opening Balance.\" width=\"737\" height=\"384\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/09\/Reporting-of-Input-Tax-Credit-Reversal-Opening-Balance..jpeg 311w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/09\/Reporting-of-Input-Tax-Credit-Reversal-Opening-Balance.-300x156.jpeg 300w\" sizes=\"(max-width: 737px) 100vw, 737px\" \/><\/h2>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69da6d4635d8d\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69da6d4635d8d\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.caindelhiindia.com\/blog\/sec-164-claiming-itc\/#Complete_Explanation_of_Section_164_of_Central_Goods_and_Services_Act_2017\" title=\"Complete Explanation of Section 16(4) of Central Goods and Services Act, 2017 :\">Complete Explanation of Section 16(4) of Central Goods and Services Act, 2017 :<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.caindelhiindia.com\/blog\/sec-164-claiming-itc\/#Discussion_to_Section_164_of_GST_Laws\" title=\"Discussion to Section 16(4) of GST Laws\">Discussion to Section 16(4) of GST Laws<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.caindelhiindia.com\/blog\/sec-164-claiming-itc\/#What_is_deadline_of_Claiming_Availing_Input_Tax_Credit_ITC\" title=\"What is deadline of Claiming \/ Availing Input Tax Credit (ITC) \">What is deadline of Claiming \/ Availing Input Tax Credit (ITC) <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.caindelhiindia.com\/blog\/sec-164-claiming-itc\/#What_is_Vested_Right_Entitlement\" title=\"What is Vested Right &amp; Entitlement?\">What is Vested Right &amp; Entitlement?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.caindelhiindia.com\/blog\/sec-164-claiming-itc\/#Kavin_HP_Gas_Gramin_Vitrak_vs_The_Commissioner_of_Commercial_Tax_2023\" title=\"Kavin HP Gas Gramin Vitrak vs The Commissioner of Commercial Tax (2023)\">Kavin HP Gas Gramin Vitrak vs The Commissioner of Commercial Tax (2023)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.caindelhiindia.com\/blog\/sec-164-claiming-itc\/#Union_of_India_vs_Brand_Equity_Treaties_Ltd_2020\" title=\"Union of India vs Brand Equity Treaties Ltd. (2020)\">Union of India vs Brand Equity Treaties Ltd. (2020)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.caindelhiindia.com\/blog\/sec-164-claiming-itc\/#Main_Provisions_of_Section_16_4_must_be_taken_care_whiles_claiming_ITC\" title=\"Main Provisions of Section 16 (4) must be taken care whiles claiming ITC :\">Main Provisions of Section 16 (4) must be taken care whiles claiming ITC :<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Complete_Explanation_of_Section_164_of_Central_Goods_and_Services_Act_2017\"><\/span><span style=\"color: #000080;\"><strong>Complete Explanation of Section 16(4) of Central Goods and Services Act, 2017 :<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li>Section 16(4) of the Central Goods and Services Act, 2017, pertains to basic conditions &amp; eligibility of taking ITC. ITC allows businesses to claim a set-off on the goods and services taxes, which is paid on inputs used during the normal course of business&#8217; &amp; profession against the Goods and Services payable on their output services or goods provided to customers.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Discussion_to_Section_164_of_GST_Laws\"><\/span><span style=\"color: #000080;\"><strong>Discussion to Section 16(4) of GST Laws<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-6522\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/12\/DiscussiononSection16_4-timelimit-2.jpg\" alt=\"Section16(4)\" width=\"2000\" height=\"1014\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/12\/DiscussiononSection16_4-timelimit-2.jpg 2000w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/12\/DiscussiononSection16_4-timelimit-2-300x152.jpg 300w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/12\/DiscussiononSection16_4-timelimit-2-1024x519.jpg 1024w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/12\/DiscussiononSection16_4-timelimit-2-768x389.jpg 768w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/12\/DiscussiononSection16_4-timelimit-2-1536x779.jpg 1536w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/12\/DiscussiononSection16_4-timelimit-2-800x406.jpg 800w\" sizes=\"(max-width: 2000px) 100vw, 2000px\" \/><\/h2>\n<p>Under section 16(4) of the Central Goods and Services Act, 2017 clearly says that a GST Registered person can only claim ITC only if Goods or services received are used in the course or furtherance of their business. Personal use of goods or services disqualifies them from claiming Input Tax Credit.<\/p>\n<p>Means to say that Section 16(4) of Central Goods and Services Act, 2017 is only allowed for used of ITC in case Goods \/ Services are not used for personal use, In case it is used for personal purpose than its are not eligible to claim the Input Tax Credit.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"What_is_deadline_of_Claiming_Availing_Input_Tax_Credit_ITC\"><\/span><span style=\"color: #000080;\"><strong>What is deadline of Claiming \/ Availing Input Tax Credit (ITC) <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Deadline \/ Time limit to claim Input Tax Credit on invoices or debit notes of a FY is Revised to earlier of below of due dates.<\/p>\n<ul>\n<li>1st on is ,\u00a030th November of the Next Year or<\/li>\n<li>2nd Year, Date of filing annual returns under the GST .<\/li>\n<\/ul>\n<p>So we can say that a GST registered person cannot claim Input Tax Credit (ITC) after the below Dates.<\/p>\n<ul>\n<li>30th November of the Next Year or<\/li>\n<li>Date of filing annual GST returns &#8211; Whichever is earlier.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"What_is_Vested_Right_Entitlement\"><\/span><span style=\"color: #000080;\"><strong>What is Vested Right &amp; Entitlement?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-6529\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/12\/DiscussiononSection16_4-timelimit-23.jpg\" alt=\"16(4).\" width=\"2000\" height=\"986\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/12\/DiscussiononSection16_4-timelimit-23.jpg 2000w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/12\/DiscussiononSection16_4-timelimit-23-300x148.jpg 300w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/12\/DiscussiononSection16_4-timelimit-23-1024x505.jpg 1024w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/12\/DiscussiononSection16_4-timelimit-23-768x379.jpg 768w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/12\/DiscussiononSection16_4-timelimit-23-1536x757.jpg 1536w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/12\/DiscussiononSection16_4-timelimit-23-800x394.jpg 800w\" sizes=\"(max-width: 2000px) 100vw, 2000px\" \/><\/p>\n<p>Constitution of India Article 300A, Right to Property: \u201cNo person shall be deprived of his property save by authority of law.\u201d<\/p>\n<ul>\n<li>The important words used in this article are:\n<ul>\n<li>Person<\/li>\n<li>Property<\/li>\n<li>Deprived<\/li>\n<li>Authority of Law<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li>That denial of Input Tax Credit without the authority of Law is violation of Article 300A of the Constitution of India. A person can be deprived of his right only by the authority of the law.<\/li>\n<li>Once a GST Taxpayer is entitled to credit, it becomes a vested right &amp; entitlement to take ITC credit is a procedural aspect &amp; one which cannot deny the substantive right, having regard to the structure of GST law.<\/li>\n<li>The right of entitlement to input tax credit provided through section 16(2) is supreme and sacrosanct and once the conditions are fulfilled the credit becomes a vested right by way of Article 300A of the Constitution of India.<\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-6523\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/12\/DiscussiononSection16_4-timelimit-16.jpg\" alt=\"case law on Section16(4)\" width=\"2000\" height=\"967\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/12\/DiscussiononSection16_4-timelimit-16.jpg 2000w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/12\/DiscussiononSection16_4-timelimit-16-300x145.jpg 300w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/12\/DiscussiononSection16_4-timelimit-16-1024x495.jpg 1024w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/12\/DiscussiononSection16_4-timelimit-16-768x371.jpg 768w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/12\/DiscussiononSection16_4-timelimit-16-1536x743.jpg 1536w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/12\/DiscussiononSection16_4-timelimit-16-800x387.jpg 800w\" sizes=\"(max-width: 2000px) 100vw, 2000px\" \/><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Kavin_HP_Gas_Gramin_Vitrak_vs_The_Commissioner_of_Commercial_Tax_2023\"><\/span><span style=\"color: #000080;\"><strong>Kavin HP Gas Gramin Vitrak vs The Commissioner of Commercial Tax (2023)<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>If form is not notified, petitioner cannot be expected to file the same to claim ITC &#8211; Assessee should not be prejudiced from availing credit that they are otherwise legitimately entitled<\/li>\n<li>Reversal of ITC for belated claim as per Sec. 16(4) of TNGST is not applicable, since the filing of GSTR-3B is not meant for claim of Input Tax<\/li>\n<li>Also, in the absence of any enabling mechanism, the taxpayers cannot be prejudiced by not granting ITC.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Union_of_India_vs_Brand_Equity_Treaties_Ltd_2020\"><\/span><span style=\"color: #000080;\"><strong>Union of India vs Brand Equity Treaties Ltd. (2020)<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-6526\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/12\/DiscussiononSection16_4-timelimit-22.jpg\" alt=\"case law on Section16(4) ..\" width=\"2000\" height=\"934\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/12\/DiscussiononSection16_4-timelimit-22.jpg 2000w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/12\/DiscussiononSection16_4-timelimit-22-300x140.jpg 300w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/12\/DiscussiononSection16_4-timelimit-22-1024x478.jpg 1024w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/12\/DiscussiononSection16_4-timelimit-22-768x359.jpg 768w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/12\/DiscussiononSection16_4-timelimit-22-1536x717.jpg 1536w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/12\/DiscussiononSection16_4-timelimit-22-800x374.jpg 800w\" sizes=\"(max-width: 2000px) 100vw, 2000px\" \/><\/p>\n<p>First argued at Delhi High Court in the matter of Brand Equity Treaties Ltd. vs UOI (2020) where it was held that the rules prescribe the period as merely directory and due to non- filing\/delay in filing of Form GST TRAN-1 cannot be the ground for denial of transitional credit. Then GST Dept went to Supreme Court and SC in the Landmark Judgement allowed credit to everyone &amp; GST Portal was Reopened.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Main_Provisions_of_Section_16_4_must_be_taken_care_whiles_claiming_ITC\"><\/span>Main Provisions of Section 16 (4) must be taken care whiles claiming ITC :<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Registered Person Eligibility\u00a0can claim the input tax credit, ensuring that unregistered entities do not take advantage of the ITC system and cause revenue loss for the government.<\/li>\n<li>Proper Documentation related accounting and record keeping,<\/li>\n<li>Business Use must be utilized solely for business purposes,<\/li>\n<li>Enhanced Business Accountability for claim ITC for legitimate business purposes, promoting transparency and accountability in the taxation system.<\/li>\n<li>Importance of Documentation necessitating record-keeping of all purchases and expenses &amp; Compliance Requirements must be taken care,<\/li>\n<li>Understanding and complying with Section 16 (4) is vital for businesses to avoid penalties and legal implications.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Complete Explanation of Section 16(4) of Central Goods and Services Act, 2017 : Section 16(4) of the Central Goods and Services Act, 2017, pertains to basic conditions &amp; eligibility of taking ITC. ITC allows businesses to claim a set-off on the goods and services taxes, which is paid on inputs used during the normal course &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[144],"tags":[949,950],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/6521"}],"collection":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/comments?post=6521"}],"version-history":[{"count":4,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/6521\/revisions"}],"predecessor-version":[{"id":6533,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/6521\/revisions\/6533"}],"wp:attachment":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/media?parent=6521"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/categories?post=6521"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/tags?post=6521"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}