What is the Life of GST Input Tax Credit 

By | February 9, 2019
(Last Updated On: February 9, 2019)

 What is the Life of GST Input Tax Credit 

 What is the Time limit to avail the Input  Tax Credit ?

A registered person is not entitled to avail input tax credit on tax invoice/ debit notes after the due date of

  • furnishing of the return under section 39 for the month of September of the subsequent financial year ( This Time may be extended by Govt) or
  • furnishing of the relevant annual return,

 Whichever is earlier.


(Section 16(4) of CGST Act 2017)

Comment: In a situation where the credit that is ‘available’ is but ‘not availed’, it would still be available but not beyond the limitation prescribed in Section 16(4). Thus you can avail Input Tax Credit with delay.

When is Input Tax Credit said to be availed?

 Input tax credit can be said to have been “availed‟ when it is entered into the electronic credit ledger of the registered person.

Under the current dispensation, this happens when the said taxable person files his/her monthly return in FORM GSTR-3B.

[ Circular No 79/50/2018 GST Dated 31st December 2018 ]

 What is the life of Input Tax Credit after it is availed? 

Once Input Tax Credit is availed, it  can be utilized at any time

After the credit stands availed, it is available without any time limit.

 The credit availed is permanently available to the taxable person.

 When should Reversal /Payment of Availed Input Tax Credit is done ? 

  • Where any registered person who has availed of input tax credit opts to pay tax under section 10 (Composition Levy ) or,
  • where the goods or services or both supplied by him become wholly exempt,

he shall pay an amount, by way of debit in the electronic credit ledger or electronic cash ledger, equivalent to the credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock and on capital goods, reduced by such percentage points as may be prescribed, on the day immediately preceding the date of exercising of such option or, as the case may be, the date of such exemption:

However after payment of such amount, the balance of input tax credit, if any, lying in his electronic credit ledger shall lapse.

(section 18(4) of CGST Act 2017 )

 What to do in case of doubt of availability of Input Tax Credit?

 My Opinion: In case of doubts one can avail the credit and then reverse  under protest under intimation to revenue (GST Department ) .

 Once clarity emerges from Courts/Advance Ruling then you can reclaim and thus time limitation would not be the reason for non availment of Input Tax Credit.

 Refer GST Input Tax Credit : Free Study Material







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About CA Satbir Singh

Chartered Accountant having 12+ years of Experience in Taxation , Finance and GST related matters and can be reached at Email : Taxheal@gmail.com

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