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Circular No. 237/31/2024-GST
F. No. CBIC-20001/6/2024-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
****
New Delhi, dated the 15th October, 2024
To,
The Principal Chief Commissioners/ Chief Commissioners/ Principal Commissioners/
Commissioners of Central Tax (All)
The Principal Directors General/ Directors General (All)
Madam/Sir,
Subject: Clarifying the issues regarding implementation of provisions of sub-section (5)
and sub-section (6) in section 16 of CGST Act, 2017-reg.
Reference is invited to sub-section (5) and sub-section (6) of section 16 of the Central
Goods & Services Tax Act, 2017 (hereinafter referred to as the “CGST Act”) inserted in
section 16 of the CGST Act, with effect from the 1st day of July, 2017, vide section 118 of
the Finance (No. 2) Act, 2024, whereby the time limit to avail input tax credit under
provisions of sub-section (4) of section 16 of CGST Act has been retrospectively extended in
certain specified cases.
1.2
Sub-section (4), sub-section (5) and sub-section (6) of section 16 of the CGST Act are
reproduced below for ready reference:
“(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 thirtieth
day of November following the end of financial year to which such invoice or
debit note pertains or furnishing of the relevant annual return, whichever is
earlier.
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
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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.
(5) Notwithstanding anything contained in sub-section (4), in respect of an
invoice or debit note for supply of goods or services or both pertaining to the
Financial Years 2017-18, 2018-19, 2019-20 and 2020-21, the registered
personshall be entitled to take input tax credit in any return under section 39
which is filed upto the thirtieth day of November, 2021.
(6) Where registration of a registered person is cancelled under section 29 and
subsequently the cancellation of registration is revoked by any order, either under
section 30 or pursuant to any order made by the Appellate Authority or the
Appellate Tribunal or court and where availment of input tax credit in respect of
an invoice or debit note was not restricted under sub-section (4) on the date of
order of cancellation of registration, the said person shall be entitled to take the
input tax credit in respect of such invoice or debit note for supply of goods or
services or both, in a return under section 39,––
(i) filed upto thirtieth day of November following the financial year to which such
invoice or debit note pertains or furnishing of the relevant annual return,
whichever is earlier; or
(ii) for the period from the date of cancellation of registration or the effective date
of cancellation of registration, as the case may be, till the date of order of
revocation of cancellation of registration, where such return is filed within thirty
days from the date of order of revocation of cancellation of registration,
whichever is later.”
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Further, it has been provided in section 150 of the Finance (No.2) Act, 2024
(reproduced below), that no refund of any tax paid or the input tax credit reversed shall be
granted on account of the said retrospective insertion of sub-section (5) and sub-section (6) of
section 16 of the CGST Act.
“150. No refund shall be made of all the tax paid or the input tax credit reversed,
which would not have been so paid, or not reversed, had section 118 been in force
at all material times.”
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Besides, vide Notification No. 22/2024 –Central tax dated 08.10.2024, a special
procedure for rectification of orders has been notified under section 148 of the CGST Act, to
be followed by the class of taxable persons, against whom orders under section 73 or section
74 or section 107 or section 108 of the CGST Act have been issued confirming demand for
wrong availment of input tax credit on account of contravention of provisions of sub-section
(4) of section 16 of the CGST Act, but where such input tax credit is now available as per the
provisions of sub-section (5) or sub-section (6) of section 16 of the CGST Act, and where
appeal against the said order has not been filed.
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1.5
Representations have been received from trade and industry requesting for
clarification in respect of various issues pertaining to availment of benefit of the said
amendments in section 16 of CGST Act to the taxpayers against whom demands have been
issued alleging wrong availment of input tax credit in contravention of provisions of sub-
section (4) of section 16 of CGST Act, who are now entitled to avail the said input tax credit
as per the retrospectively inserted provisions of sub-section (5) or sub-section (6) of section
16 of the CGST Act.
2.
In order to ensure uniformity in the implementation of the provisions of law across the
field formations, the Board, in exercise of its powers conferred by section 168 (1) of the
CGST Act, hereby clarifies the issues as below.
3.
The following action may be taken by the tax authorities and/ or the taxpayers in
various scenarios for availment of benefit on account of retrospectively inserted provisions of
sub-section (5) or sub-section (6) of section 16 of the CGST Act:
3.1 Where no demand notice/statement has been issued under section 73 or section 74 of
the CGST Act:
In cases, where any investigation/proceedings in respect of wrong availment of input tax
credit alleging contravention of provisions of sub-section (4) of section 16 of the CGST
Act has been initiated, but no demand notice/statement under section 73 or section 74 of
the said Act has been issued, and taxpayers are now entitled to avail the said input tax
credit under the provisions of sub-section (5) or sub-section (6) of section 16 of the
CGST Act, the proper office shall take cognizance of the sub-section (5) or sub-section
(6) of section 16 of CGST Act, inserted retrospectively with effect from 01.07.2017 and
take further appropriate action. This also includes the cases where an intimation in FORM
DRC-01A has been issued under rule 142(1A) of the CGST Rules for denial of input tax
credit on account of contravention of sub-section (4) of section 16 of the said Act, but no
demand notice/statement under section 73 or section 74 of the said Act has been issued.
3.2 Where demand notice/ statement under section 73 or section 74 of CGST Act has
been issued but no order under section 73 or section 74 of CGST Act has been issued
by the Adjudicating Authority:
In such cases, the Adjudicating Authority shall take cognizance of sub-section (5) or sub-
section (6) of section 16 of the CGST Act, inserted retrospectively with effect from
01.07.2017, and pass appropriate order under section 73 or section 74 of the CGST Act.
