News & Media

The Curious Case of ITC Admissibility

Jul 8, 2020
  • Author(s) : Jignesh Ghelani
  • One of the objectives of the Goods and Services Tax (GST) regime is to avoid the cascading effect of taxes and to ensure seamless flow of credits. Amongst the mandatory provisions for availment of ITC, there exists a crucial provision under Section 16(4) of the CGST Act, which specifies the prescribed time limit for the availment of ITC. This provision can be regarded as one of the litmus tests which would have to be passed by an assessee in order to avail the ITC under the CGST Act.

    Jignesh Ghelani, Partner along-with Ashwin Ramesh, Associate Manager, in their recent article for Taxsutra explain how the ‘time of raising the invoice’ becomes a crucial factor in determining the admissibility of ITC for an assessee. Authors further examine the aspect from the perspective of both the forward charge and reverse charge supplies of input services. In this article, the authors with the help of an example illustrate three scenarios for different class of taxpayers (registered & unregistered supplier) explaining how the time limit for availment of ITC for forward charge and reverse charge affects supplies.

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