Section 16 CGST Act 2017 : Eligibility and condition for taking input tax credit.

By | April 16, 2017
(Last Updated On: August 4, 2018)

Section 16 CGST Act 2017

[ Section 16 CGST Act 2017 Notified w.e.f 01.07.2017 vide Notification No. 9/2017 – Central Tax Dated 28th June, 2017 ]

Section 16 CGST Act 2017 explains Eligibility and condition for taking input tax credit and is covered on Chapter V – Input Tax Credit 

[Note : CGST Act 2017 also known as CENTRAL GOODS AND SERVICES TAX ACT, 2017 assented by the President of India on 12-4-2017 -An Act to make a provision for levy and collection of tax on intra-State supply of goods or services or both by the Central Government and the matters connected therewith or incidental thereto. ]

Eligibility and condition for taking input tax credit.

16. (1) Every registered person shall, subject to such conditions and restrictions as may be prescribed [ Note -1,  2 , 3 ,4,5,6 ,7,8 ,9 ,9A, 9B,10,12,13] 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.

Explanation.—For the purposes of this clause, it shall be deemed that the registered person has received the goods 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;

(c) subject to the provisions of section 41, 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.

(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 due date of furnishing of the return under section 39 for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier.[Note-11]


Notifications issued under Section 16 CGST Act 2017

13  Notification No 14/2018 Integrated Tax (Rate)  Dated 26 th July, 2018 Seeks to amend notification No. 8/2017- Integrated Tax (Rate) so as to notify IGST rates of various services as recommended by Goods and Services Tax Council in its 28th meeting held on 21.07.2018.

12 Notification No 13/2018 Central Tax (Rate) Dated 26th July, 2018  New CGST rates of various services

11. Refer Q 22 of GST FAQs on Financial Services Sector published by CBIC

1. . To notify the rates for supply of services under UTGST Act vide Notification No. 11/2017-Union Territory Tax (Rate) Dated the 28th June, 2017

2.. To notify the rates for supply of services under CGST Act vide Notification No. 11/2017-Central Tax (Rate) Dated 28th June, 2017

3. To notify the rates for supply of services under IGST Act vide Notification No. 8/2017-Integrated Tax (Rate) Dated 28th June, 2017

4. Seeks to amend notification No. 11/2017-CT(R) to reduce CGST rate on specified supplies of Works Contract Services, job work for textile & textile products, printing service of books, newspapers etc, admission to planetarium, and, also to provide option to GTA & transport of passengers by motorcab service providers to avail full ITC & discharge CGST @ 6% Vide Notification No 20/2017 Central Tax (Rate) Dated 22nd August, 2017

5.Seeks to amend notification No. 08/2017-IT(R) to reduce IGST rate on specified supplies of Works Contract Services, job work for textile & textile products, printing service of books, newspapers etc, admission to planetarium, and, also to provide option to GTA & transport of passengers by motorcab service providers to avail full ITC & discharge IGST @ 12% Vide Notification No 20/2017 Integrated Tax (Rate) Dtd 22nd Aug 2017

6. Seeks to amend notification No. 11/2017-UTT(R), to reduce UTGST rate on specified supplies of Works Contract Services, job work for textile & textile products, printing service of books, newspapers etc, admission to planetarium, and, also to provide option to GTA & transport of passengers by motorcab service providers to avail full ITC & discharge UTGST @ 6% vide Notification No 20/2017 Union Territory Tax (Rate) Dtd 22nd Aug 2017

7. Seeks to amend notification No. 11/2017-CT(R) to reduce CGST rate on specified supplies of Works Contract Services vide Notification No 24/2017 Central Tax (Rate) dated 21st September, 2017

8. Seeks to amend notification No. 08/2017-IT(R) to reduce IGST rate on specified supplies of Works Contract Services. vide Notification No. 24/2017-Integrated Tax (Rate) dated  the 21st September, 2017

9. Seeks to amend notification No. 11/2017- UTT(R) to reduce UGST rate on specified supplies of Works Contract Services vide Notification No 24/2017 Union Territory Tax (Rate) dated21st September, 2017

9A  Notification No 31/2017 Central Tax (Rate)  Dated 13th October, 2017 Seeks to amend notification No. 11/2017-CT(R) 

9B Notification No 39/2017 Integrated Tax (Rate) dated 13th October, 2017 Seeks to amend notification No. 8/2017-Integrated Tax (Rate).

10. Seeks to amend notification No. 11/2017-CT(R) so as to specify rate @ 2.5% for standalone restaurants and @9% for other restaurants, reduce rate of job work on “handicraft goods” @ 2.5% and to substitute “Services provided” in item (vi) against Sl No. 3 in table. vide Notification No 46/2017 Central Tax (Rate) Dated 14th November, 2017

 

 If you have any comments about Section 16 of CGST Act 2017 , share below your thoughts:

Read Draft Input Tax Credit Rules

Related Book on GST Act

Section 16 CGST Act 2017

Direct Taxes Ready Reckoner
Service Tax Ready Reckoner
Company Law Ready Reckoner
tax deduction at source
New Books Released on Tax , GST and law

34 thoughts on “Section 16 CGST Act 2017 : Eligibility and condition for taking input tax credit.

  1. Pingback: CGST Act 2017 - Chapter Wise and Section Wise - Tax Heal

  2. Pingback: Section 17 CGST Act 2017 - Apportionment of credit and blocked credits. - Tax Heal

  3. Pingback: Section 19 CGST Act 2017 - Taking input tax credit in respect of inputs and capital goods sent for job work. - Tax Heal

  4. Pingback: Redraft rule 2 of GST ITC Rule - Reversal of credit on non-payment of consideration - ICAI - GST Rules Issue 17 - Tax Heal

  5. Pingback: Draft GST Input Tax Credit -ITC Rules Released on 31.03.2017 - Tax Heal

  6. Pingback: GST Input Tax Credit & Reversal - Payment not made in 180 days - Accounting entries - Tax Heal

  7. Pingback: GST paid on advance payment is Not avaliable as input credit - Tax Heal

  8. Pingback: Final GST Input Tax Credit Rules - GST ITC Rules - Approved by GST Council - Download - Print - Tax Heal

  9. Pingback: Exemptions on supply of services under CGST Act - Notification No. 12/2017-Central Tax (Rate) Dated 28th June, 2017 - Tax Heal

  10. Pingback: GST on Mining Sector : FAQ - Tax Heal

  11. Pingback: GST FAQ Food Processing Industry released by CBEC - Tax Heal

  12. Pingback: IGST Rates on services - Notification No 8/2017 Integrated Tax (Rate) Dated 28th June, 2017 - Tax Heal

  13. Pingback: ICAI Suggestions on GST Act to Govt : July 2017 - Tax Heal

  14. Pingback: Notification No 20/2017 Integrated Tax (Rate) Dtd 22nd Aug 2017 : to reduce IGST rate on specified supplies of Works Contract Services, job work for textile & textile products, printing service of books, newspapers etc, admission to planetarium , GTA

  15. Pingback: Notification No 20/2017 Central Tax (Rate) Dtd 22nd Aug 2017 : GST Rate reduced for Work Contract Service , , job work for textile & textile products, printing service of books, newspapers etc, admission to planetarium, GTA Services , Motor Cab Servic

  16. Pingback: Suggestions on GST Implementation Issues 28.09.2017 by ICAI Indirect Tax Committee - Tax Heal

  17. Pingback: GST : Reversal of Credit on non-payment of taxes : ICAI Suggestions - Tax Heal

  18. Pingback: Notification No 48/2017 Integrated Tax (Rate) : IGST rate restaurants & job work on handicraft goods - Tax Heal

  19. Pingback: Notification No 46/2017 Union territory Tax (Rate) : UTGST Rate restaurants and job work on handicraft goods - Tax Heal

  20. Pingback: When you Can not Claim ITC under GST - Tax Heal

  21. Pingback: GST ITC on Train Ticket - Tax Heal

  22. Pingback: GST ITC on Demurrage charges - Tax Heal

  23. Pingback: Change of Business : Can you claim Input Tax Credit under GST - Tax Heal

  24. Pingback: Example Rule 8 of GST Input Tax Credit Rule - Capital Goods Partly used for Business and partly for other purposes - Tax Heal

  25. Pingback: How to Claim Prepaid expenses ITC under GST - Tax Heal

  26. Pingback: How to Claim GST Input Tax Credit on Repair of Factory Building - Tax Heal

  27. Pingback: Can you claim Refund of GST Paid if Debtor become Bad debt - Tax Heal

  28. Pingback: GST on Advance Payments of Goods & Services - Analysis - Tax Heal

  29. Pingback: Last date to claim Input Tax Credit for FY 2017-18 - Tax Heal

  30. Pingback: No need to Reverse Input Tax Credit for non payment if recipient Supplied Material to Supplier - Tax Heal

  31. Pingback: Notification No 26/2018 Central Tax : CGST (Fifth Amendment) Rules 2018. - Tax Heal

  32. Pingback: GST on Goods Lost by Theft - Tax Heal

  33. Pingback: Claim of Input Tax Credit if Service Provided to third person - Tax Heal

  34. Pingback: GST Audit Checklist : User Guide on GST Audit - Tax Heal

Leave a Reply

Your email address will not be published. Required fields are marked *