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CA Intermediate · Taxation (Income Tax + GST)

GST — Input Tax Credit (Sec 16-18)

Chapter 5 · 2 formulas · 4 exam-critical pointers

Core concepts

  1. 01ITC eligibility: registered, possession of tax invoice, receipt of goods/services, supplier paid tax & filed return, recipient filed return.
  2. 02Time limit: ITC must be claimed by 30th Nov of next FY or annual return filing — whichever earlier.
  3. 03Blocked credits (Sec 17(5)): motor vehicles (with exceptions), food, club membership, personal use.
  4. 04Apportionment (Sec 17): partly used for business/personal or taxable/exempt — pro-rata.
  5. 05ITC reversal: non-payment to supplier within 180 days (with re-availment on payment).

Flowchart

ITC Eligibility Checklist | [✓] Registered taxable person [✓] Tax invoice / valid document [✓] Goods/services received [✓] Tax paid by supplier (per GSTR-2B) [✓] Return filed (GSTR-3B) | = ITC claimable

Exam-critical pointers

  • ⭐Sec 16(2)(aa): ITC restricted to invoices reflected in GSTR-2B (auto-populated).
  • ⭐Capital goods ITC apportioned over 60 months (5 years) under Rule 43.
  • ⭐ISD (Input Service Distributor): mechanism for HO to allocate ITC to branches.
  • ⭐Sec 16(4) — wide-ranging time-bar restriction; recent amendment from 30 Nov for FY 2017-18 to 2020-21.

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