ITC on invoices relating to a financial year or debit notes identifying with invoices relating to a financial year can be profited any time till the due date of filing of the return for the month of September of the succeeding financial year or the date of filing of the significant yearly return, whichever is prior.
It might be noticed that the return for the month of September is to be filed by twentieth October and yearly return of a financial year is to be filed by 31st December of the succeeding financial year.
In this way, the upper time limit for taking ITC is twentieth October of the following financial year or the date of filing of yearly return, whichever is prior. The basic reason for this limitation is that no adjustment consequently is allowed after September of next financial year. In case that yearly return is filed before the month of September, at that point no change can be made after filing of yearly return.
Special case
The time restriction u/s 16(4) doesn’t make a difference to claim for re-benefiting of credit that had been reversed before.
Example – Hercules Machinery delivered a machine to ABC in January 2019 under Invoice no. 49 dated 28th January, 2019 for Rs. 4,15,000 plus GST, and attempted preliminary runs and adjustment of the machine according to the requirements of ABC. The total amount chargeable for the post-delivery activities was covered in a debit note brought up in April 2019 for Rs. 50,000 plus GST. ABC didn’t file its yearly return till October, 2019.
In spite of the fact that the debit note was received in the following financial year, it identifies with a invoice received in the financial year ending March 2019. Hence, the time limit for taking ITC accessible on Rs. 50,000 just as on Rs. 4,15,000 is 20th October, 2019; prior of the date of filing the yearly return for 2018-19 or the return for September 2019.
Enquire with Certicom Consulting in case of any queries.