Study of GST Section 16(4) Amendments for ITC Availment

The provisions of section 100 are to take effect on 1st October 2022. This is a notification issued by the GST Department on 28 September 2022.

“As per Section 100(b) of the Finance Act, 2022, in section 16(4) of the CGST Act, 2017, for the words “due date of furnishing of the return u/s 39 for the month of September”, the words “thirtieth day of November” shall be substituted.”

GST Section 16(4) Amendments

If a registered person receives an invoice or debit note for a supply of goods or services or both, or both, after 30th November following the end of the FY to which such invoice or debit note pertains, or after the filing of the relevant annual return, whichever is earlier, he or she shall not be eligible to claim ITC. Simply put, you have till the 30th of November of the next FY or the date on which you file your Annual Return (GSTR 9) in order to claim ITC for invoices/debit notes. The government has extended the ITC claim period by 41 days (from October 20th to November 30th).

Issue – A registered person can claim ITC in Table 4 of GSTR-3B. A registered person wants to know in which tax period they can claim ITC on GSTR-3B after this amendment.

Monthly GST Return Filers

It doesn’t matter whether you file the GSTR-3B form for November’s month (20th December) or the GSTR-3B form for October’s month (20th November)

According to amended Section 16(4), the last date to claim ITC for monthly return filers will be 20th November of next FY, since the last date to claim ITC is 30th November, and after that, a registered person cannot claim ITC. You can claim ITC only in the month of October through GSTR-3B, the 20th of November.

Thus, the ITC time limit is extended by 31 days (i.e. from the 20th of October of the next fiscal year to the 20th of November of the following fiscal year) rather than 41 days.

It is also possible to argue that monthly return filers will be able to claim ITC until 20th December of next FY since ITC cannot be taken as of 30th November. As a result, registered persons are able to claim ITC in GSTR-3B in the month of November, i.e., the 20th of December of the following fiscal year.

A registered person can only take advantage of ITC until the 20th of November of the following fiscal year, which is October’s GSTR-3B. When claiming ITC in November, GSTR-3B, which is due on 20th December, the GST department may issue notices, which could take the form of a lawsuit.

There is a need for clarification from the government on this issue. If you want to claim ITC before then, you should apply for it using the GSTR-3B return filing form only in October.

GST for Filing of Quarterly Return

If you file your returns quarterly, this issue is much more pronounced, regardless of whether you are filing the GTSR-3B of the September quarter (the 22nd/24th October, for example) or the GTSR-3B of the December quarter (the 22nd/24th January, for example, as the case may be.

According to amended Section 16(4), the last date to claim ITC will remain the same for quarterly return filers i.e. 22nd/24th October of the next FY since the last date to claim ITC is 30th November. Only the 22nd/24th of October is the deadline for availing ITC under GSTR-3B for the September quarter.

As of the September month’s quarter, GSTR-3B for the December quarter will be filed on the 22nd/24th of January, which is far beyond the 30th of November, 2022, so there is no extension in the time limit for ITC claiming for quarterly return filers.

There can be no argument that the last date for quarterly return filers to claim ITC is GTSR-3B of the December quarter, i.e., 22nd/24th January of the following year.

The ITC availment deadline has not changed for quarterly return filers. There is a need for clarification on this issue by the government on behalf of those who file quarterly tax returns, otherwise, the extension of this time limit will not benefit them.