ITC Is Allowable Under Section 16(5) When Returns Are Furnished Before the Stipulated Extended Cut-Off Date

By | October 15, 2026
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ITC Is Allowable Under Section 16(5) When Returns Are Furnished Before the Stipulated Extended Cut-Off Date

Issue

Whether the petitioner is entitled to Input Tax Credit (ITC) for the period 01.04.2018 to 31.03.2019 under Section 16(5) of the CGST/KSGST Act when monthly returns were filed after the original Section 16(4) deadline but before November 30, 2021.

Facts

  • Registration & Period: The petitioner, registered under the CGST/KSGST Act, claimed Input Tax Credit (ITC) for the financial year 2018–19 (01.04.2018 to 31.03.2019).
  • Return Filing Dates: The monthly returns for February 2019 and March 2019 were filed on 13.11.2019 and 27.11.2019, respectively.
  • Adjudication Order: The assessing authority issued an order (Ext.P2) denying the ITC claim on the grounds that the February and March 2019 returns were not submitted within the statutory timeline prescribed under Section 16(4).
  • Assessee’s Claim: The petitioner invoked the newly introduced/amended Section 16(5), contending that ITC is allowable for returns furnished on or before November 30, 2021.

Decision

  • Applicability of Section 16(5): Since the returns for February 2019 and March 2019 were furnished on 13.11.2019 and 27.11.2019, they were well within the extended cut-off date of November 30, 2021, specified under Section 16(5).
  • Overriding Effect: The beneficial provisions of Section 16(5) govern ITC entitlement, overriding the earlier disallowance made under Section 16(4).
  • Order Quashed: The Ext.P2 order denying ITC was quashed.
  • Remand Direction: The assessing authority was directed to reconsider the claim and grant ITC on the strength of Section 16(5) if the petitioner is otherwise eligible. (In favour of assessee)

Key Takeaways

  • Relief via Section 16(5): Section 16(5) acts as a beneficial relaxation for taxpayers who filed their pending GSTR-3B returns for FY 2017–18, 2018–19, 2019–20, and 2020–21 on or before November 30, 2021.
  • Override over Section 16(4) Disallowance: Previous ITC disallowances or demand orders passed strictly under the limitation period of Section 16(4) are unsustainable where the return filing date falls within the Section 16(5) window.
  • Prerequisite for Granting ITC: While procedural time limits are relaxed under Section 16(5), the taxpayer must still fulfill all other substantive conditions required for claiming ITC.
HIGH COURT OF KERALA
Maya Vinod
v.
Assistant State Tax Officer
ZIYAD RAHMAN A.A., J.
WP(C) NO. 33728 OF 2026
OCTOBER  1, 2026
Vinayak Manoharan P., Lindons C. Davis, Smt. E.U. Dhanya, Smt. N.S. Shamila and Smt. Chinju P. Joyies, Advs. for the Petitioner. Smt. Sindhu Santhalingam, Sr. GP for the Respondent.
JUDGMENT
1. The petitioner, is a registered taxpayer under the provisions of the CGST (Central Goods and Services Act, 2017) (for short ‘CGST Act’)/KSGST (Kerala State Goods and Services Act, 2017) (for short “KSGST Act’) Act. The challenge raised by the petitioner is against Ext.P2 Order passed under Section 73 of the CGST Act, by which, the input tax credit claimed by the petitioner, pertaining to the tax period from 01.04.2018 to 31.03.2019 has been declined on the reason that, the petitioner, failed to submit the monthly returns for the months of February and March 2019 within the statutory period contemplated under Section 16(4) of the Act. The challenge is raised by the petitioner mainly on the ground that, in the light of Section 16(5) of the CGST Act, the petitioner is entitled to get the input tax credit, as she submitted the returns, within the time limit contemplated under Section 16(5) of the CGST Act. As per the said provision, in case the taxpayer is furnishing the return on or before 30.11.2021, such taxpayer would be entitled to claim the input tax credit. In this case, it is discernible from Ext.P3 that the petitioner furnished the returns for the months of February and March 2019 on 13.11.2019 and 27.11.2019 respectively and thus the same are filed within the cut-off date contemplated under Section 16(5). Therefore, the petitioner is entitled to get the benefit.
2. Accordingly, this writ petition is disposed of quashing Ext.P2, with a direction to the assessing authority to reconsider the matter and to grant the benefit of input tax credit to the petitioner, which was denied in Ext.P2 for noncompliance of Section 16(4), on the strength of Section 16(5) of the CGST Act, if the petitioner is otherwise entitled.