2017 18 का GST ITC 2023 24 में कैसे claim करें or can you take gst itc after the expiry of 16(4)
The core of the discussion revolves around the interpretation and implications of Section 16(4) of the GST Act, which prescribes a time limit for claiming Input Tax Credit (ITC). The central question debated is whether this time limit is mandatory, thereby extinguishing the right to ITC if not claimed within the stipulated period, or merely directory, affecting only the remedy or procedure for claiming the credit.
One perspective, largely drawn from an external article and supported by Rajesh Ji, posits that Section 16(4) is directory. This argument hinges on several points: Section 16(4) is placed separately from the core conditions for ITC eligibility listed in Section 16(2) (like possession of invoice, receipt of goods/services, tax payment by supplier). Section 16(2) begins with a "Notwithstanding anything contained in this section" clause, suggesting it primarily governs the fundamental entitlement or vesting of the ITC right. The argument draws a distinction between "extinguishing prescription" (where the right itself is lost, mandatory) and "limitation" (where only the remedy is barred, directory). It's argued that failure to meet 16(2) conditions leads to non-vesting or divestiture (extinguishing the right), while 16(4) merely imposes a time limit on the action of taking the credit, aligning more with a limitation period affecting the remedy. The placement and less harsh wording of 16(4) compared to potential "no credit shall be allowed" phrasing further support its directory nature. If 16(4) were mandatory, the benefit of unclaimed ITC would vest with the government (acquisitive prescription for the government), which proponents of the directory view find inconsistent with the structure, arguing the right vests upon fulfilling 16(2) conditions.
Countering this, Prateek and others argue that Section 16(4) imposes a mandatory condition precedent for the act of taking the credit, even if the basic entitlement arises from fulfilling 16(2) conditions. They emphasize the title of Section 16 itself: "Eligibility and conditions for taking input tax credit," suggesting the section covers both aspects. Section 16(1) also uses the phrase "entitled to take," linking entitlement and the act of taking. From this viewpoint, the "Notwithstanding" clause in 16(2) means that only the conditions in 16(2) determine fundamental eligibility (turning input tax into ITC), but it doesn't preclude other conditions within Section 16, like the time limit in 16(4), from governing the actual claiming process. The negative phrasing in 16(4) ("A registered person shall not be entitled to take...") is interpreted as a clear bar on the action of taking credit after the deadline, making it effectively mandatory for the claim itself. They argue that the legislature deliberately separated 16(2) and 16(4) but intended both sets of conditions (eligibility under 16(2) and timing/procedure under 16(4)) to be met for a successful claim.
The discussion also touched upon related practical issues and legal precedents. The Bharti Airtel case was frequently mentioned, with participants suggesting a need to re-examine its findings in light of these nuanced interpretations. The original understanding seemed to be that the court denied a late claim, but the exact basis (failure of 16(2) conditions vs. time bar under 16(4)) requires clarification. Another pertinent debate arose from an officers' group regarding whether ITC could be denied solely because it wasn't recorded in the books of accounts, even if all Section 16(2) conditions were met. One view held that failure to book is a procedural lapse attracting penalties, not ITC denial, while another controversially suggested treating such invoices as fake. This highlights the broader tension between substantive eligibility conditions and procedural requirements.
The interaction with Section 37 (regarding return filing timelines) was also briefly considered, particularly concerning its applicability and how it might reinforce or conflict with the Section 16(4) time limit, especially after amendments effective from January 2022.
In conclusion, the discussion reveals significant divergence in interpreting Section 16(4). While one
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