Input Tax Credit Claimed in March 2020 Return Filed Before Cut-Off

Input Tax Credit Claimed in March 2020 Return Filed Before Cut-Off Is Valid Under Section 16(5)

Issue

Whether an Input Tax Credit (ITC) claim for March 2020 can be denied as time-barred under Section 16(4) when the return was furnished on 17.11.2020, in light of the relaxed timeline under Section 16(5) of the CGST/KGST Act.

Facts

Taxpayer Status: The petitioner is a registered taxpayer under the Goods and Services Tax framework.
Return Filing Date: The petitioner filed its GST return for the period of March 2020 on 17.11.2020 (as evidenced by Ext.P6).
ITC Rejection: The tax authority issued an order (Ext.P1) rejecting the petitioner’s ITC claim for March 2020 on the ground that it was time-barred under Section 16(4).
Excess ITC Resolved: A separate issue regarding excess ITC recorded per GSTR-2A was settled as the petitioner remitted the disputed difference, confining the petition strictly to the time-bar rejection.
Statutory Amendment: Section 16(5) was introduced to grant eligibility for ITC claims where the return for the relevant period was furnished on or before 30.11.2021.

Decision

The court held that the return filed on 17.11.2020 falls well within the extended statutory cut-off date of 30.11.2021 prescribed under Section 16(5).
Denying ITC by applying the original limitation under Section 16(4) was held to be legally unsustainable.
The impugned order (Ext.P1) was quashed to the extent of the ITC denial for March 2020.
The matter was remanded to the tax authority to reconsider and grant the ITC in accordance with Section 16(5), provided all other eligibility criteria are met.
The issue was decided in favour of the assessee.

Key Takeaways

Overriding Effect of Section 16(5): Section 16(5) extends the time limit for claiming ITC for past returns filed on or before 30.11.2021, rendering prior time-bar rejections under Section 16(4) invalid for eligible returns.
Retrospective Relief for COVID-Era Returns: Returns filed for FY 2019-20 (including March 2020) prior to the 30.11.2021 threshold are protected from time-bar disallowances.
Scope of Reconsideration: While time-bar objections are removed under Section 16(5), the Revenue retains the right to verify substantive eligibility criteria for the claimed input tax credit.

HIGH COURT OF KERALA

Zach Rubber (P.) Ltd.

State Tax Officer

ZIYAD RAHMAN A.A., J.

WP(C) NO. 20131 OF 2026

JULY 14, 2026

M.K. Subhakaran, M.T. Muraleedharan and T.K. Thankappan, Advs. for the Petitioner. Gireesh G., SR. G.P. for the Respondent.

JUDGMENT

1. The petitioner is a registered tax payer under the provisions of CGST/SGST Act. The challenge raised by the petitioner is against Ext.P1 order passed under Sec.73 of the CGST/SGST Act 2017. As per Ext.P1, two defects were noted by the 1^st respondent. The first defect was that, the petitioner failed to submit returns for the month of March, 2020 within the period contemplated under Sec.16(4) of the CGST Act. The second defect was that, when examining the entries in GSTR 2A, it was found that the petitioner obtained excess input tax credit. According to the petitioner, as far as the 2^nd defect is concerned, the petitioner had already remitted the amount determined and the dispute is confined to the 1^st defect, which is the rejection of input tax credit claimed by petitioner alleging violation of Sec.16(4) of the CGST Act.

2. The challenge against the said defect is mainly by placing reliance upon Sec.16(5) of the CGST Act, which provides that, in case the return is submitted on or before 30.11.2021, such taxpayer would be entitled to claim input tax credit. In this case, it is discernible from Ext.P6 returns that, the petitioner had submitted the returns on 17.11.2020 and thus, it is within the cutoff date contemplated under Sec.16(5) of the CGST Act and therefore, the petitioner is entitled for the relief.

Accordingly, this writ petition is disposed of, quashing Ext.P1, to the extent it declined the input tax credit claimed by the petitioner for the month of March, 2020, on the ground of violation of Sec.16(4) of the CGST Act, with a direction to the 1st respondent to reconsider the matter and grant the benefits of the input tax credit for the month of March, 2020 in the light of Sec.16(5) of the CGST Act, if the petitioner is otherwise entitled to the same. Necessary orders in this regard shall be passed within a period of three months from the date of receipt of copy of this judgment, after affording an opportunity of hearing to the petitioner.