Input Tax Credit Claims Filed Before Cut-Off Date Are Permissible

Input Tax Credit Claims Filed Before Cut-Off Date Are Permissible Under Section 16(5)

Issue

Whether an assessee who filed GST returns for the period January to March 2019 on 31.10.2019 is entitled to claim Input Tax Credit (ITC) under the extended timeline provisions of Section 16(5) of the CGST/KGST Act, despite initial rejection under Section 16(4).

Facts

The petitioner is a registered taxpayer under the Central Goods and Services Tax (CGST) Act, 2017 and the Kerala Goods and Services Tax (KGST) Act, 2017.
The petitioner claimed Input Tax Credit (ITC) for the tax period covering January 2019 to March 2019.
Returns corresponding to these months were furnished on 31.10.2019.
The tax authority issued an Order-in-Original rejecting the ITC claim on the ground of time-bar under Section 16(4).
The petitioner filed a Rectification Application against the denial, which was subsequently rejected.
The petitioner filed a Writ Petition before the High Court challenging the orders denying the ITC claim.

Decision

The High Court held that the petitioner’s entitlement to ITC flows directly from Section 16(5), which allows credit claims for returns filed on or before the cut-off date of 31.11.2021.
The Court observed that since the petitioner had already furnished the returns on 31.10.2019, the claim strictly complied with the timeline stipulated under Section 16(5).
Judicial interference was held to be warranted, and the benefit of Section 16(5) was declared fully applicable to the petitioner.
The impugned orders denying ITC on account of non-compliance with Section 16(4) time limits were quashed to that extent.
The competent authority was directed to reconsider the petitioner’s claim and grant the Input Tax Credit on the strength of Section 16(5), provided the petitioner is otherwise eligible under law.

Key Takeaways

Overriding Effect of Section 16(5): Section 16(5) offers relaxation for past tax periods by overriding the strict time limits prescribed under Section 16(4) for taking Input Tax Credit.
Compliance Date: Taxpayers who filed their GST returns for relevant periods on or before November 31, 2021, are protected and eligible to claim ITC under the newly inserted beneficial provisions.
Pro-Assessee Relief: Denials or rejections of ITC previously made solely on the basis of Section 16(4) limitations are liable to be quashed where statutory compliance with Section 16(5) is established.

HIGH COURT OF KERALA

Mobile City Communication

State Tax Officer

ZIYAD RAHMAN A.A., J.

WP (C) NO. 25450 OF 2026

JULY 30, 2026

Smt. Sindhu M., Smt. Jasna Kunniyullathil Ismail and Smt. Maria Ancy V.J., Advs. for the Petitioner. Smt. Sindhu Santhalingam, Sr. GP for the Respondent.

JUDGMENT

1. The petitioner is a registered tax payer under the provisions of the CGST/KGST Act. Challenge raised by the petitioner in this writ petition is against Ext.P4 Order-In-Original passed under Section 73 of the CGST Act. Grievance of the petitioner is that, as per the said order, input tax credit claimed by the petitioner pertaining to the months of January, February and March, 2019 was declined on the reason that, the petitioner failed to submit the returns within the period stipulated under Section 16(4) of the Act. Although the petitioner submitted an application for recitification, the same was rejected as per Extv P9 order.

2. The challenge raised by the petitioner is by relying on Section 16(5) of the Act, which provides that, in case the taxpayer is submitting the return within the cut off date contemplated under the Act, i.e., 31.11.2021, such taxpayer would be entitled to get the benefit of input tax credit. In this case, it is discernible from Ext.P4 that, the returns for the relevant months were submitted by the petitioner on 31.10.2019 and hence, the petitioner is entitled to the benefit of the said provision. Therefore, an interference is required.

3. In such circumstances, this writ petition is disposed of quashing Exts.P4 and P9, to the extent it declined input tax credit for not filing the returns within the period stipulated under Section 16(4) of the Act, with a direction to the competent authority to reconsider the matter and grant the petitioner the input tax credit, on the strength of Section 16(5) of the Act, if the petitioner is otherwise entitled.