The document outlines the eligibility and conditions under Section 16 of the Goods and Services Tax (GST) for claiming input tax credit (ITC) by registered persons. Key conditions include possession of a valid tax invoice, receipt of goods/services, timely payment to the supplier, and compliance with GST return filing requirements. Additionally, ITC claims cannot be made after a certain deadline, and depreciation on capital goods affects eligibility.

1. Chakraborty Kapoor & Co. LLP
Cost & Management Accountants
Goods and Service Tax:
Input Tax Credit – Eligibility and Conditions
CMA C.P. Kalra
CMAArunava Chakraborty
CMA Md. Rehan
Cost & Management Accountants
Email: info@cmackc.com
Contact No. 011-26275907

2. Input Tax Credit – Chapter V
Section. 16
Eligibility and conditions for
taking credit
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3. What are the Conditions to Claim Input Tax
Credit u/s - 16?
Section 16(1)
 To claim ITC, a person has to be registered in normal
scheme.
 ITC can only be availed when input is intended to be
used in the course of furtherance of his business
 ITC can be availed subject to condition and restriction
as prescribed and in the manner specified in Sec.49
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4. S. No. Input tax
Credit against output tax
CGST
SGST/UT
GST
IGST
1 CGST  X 
2 SGST/UTGST X  
3 IGST   
First
Second
Third
Order for Credit Set-off
Credit
Mechanism
Manner of Set off- Sec.49 – Input credit Adjustment
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5. Conditions to Claim Input Tax Credit u/s – 16….
Such claim shall be credited to the electronic ledger of
registered person
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6. Conditions to Claim Input Tax Credit u/s – 16….
Section 16(2)
A registered person can claim Input Credit Tax only if:
 (a) He is in possession of Tax Invoice or debit note issued by a supplier, or
such other tax paying document as may be prescribed.
 (b) He has received Goods or Services or Both
 (c) Payment of Tax by the input Supplier for his supply actually has been
paid to the Government according to section 41
Note: Sec. 41 –claim of credit on self assessment basis and it shall be credited
to electronic credit ledger on provisional basis. This provisional credit can be
only be utilized for payment of self assessed output tax as per the return
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7. Conditions to Claim Input Tax Credit u/s – 16….
Section 16(2) (Contd……)
 (d) He has furnished GST Returns under section 39:
 Provided that goods against invoice are received in lots or installments,
registered person can take ITC upon receipt of last lot or installment.
 Provided further that payment of Supply along-with Tax (consideration) has
to be paid within 180 days from date of issue of invoice by supplier (Other
than the supplies on which tax is payable under RCM). Failing to pay within
180 days, input tax credit will be added to his output liabilities along-with
interest thereon.
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8. Conditions to Claim Input Tax Credit u/s – 16….
Section 16(2) (Contd……)
 Provided also that the recipient shall be entitled to avail of the credit of
input tax on payment made by him of the amount towards the value of
supply of goods or services or both along with tax payable thereon.
(Goods are delivered by supplier to a recipient or any other person on
direction of a registered person (whether registered person acting as agent or
otherwise), it shall be deemed goods are received by such registered person
by way of transfer of document of title to goods or otherwise
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9. Conditions to Claim Input Tax Credit u/s – 16….
Section 16(3)
 ITC shall not be allowed if depreciation under Income Tax
Act 1961 is claimed on Tax component of the of the cost of
capital goods and plant and machinery.
+
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10. Conditions to Claim Input Tax Credit u/s – 16….
Don’t be Late:
Section 16(4)
 ITC cannot be availed in respect of any Invoice or Debit note for
supply of goods and services after filing the return u/s 39 for the
month of September (ordinarily 20th October) following the end
of financial year or filing the annual return (ordinarily 31st
December) whichever is earlier.
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11. Connect us
CMA C. P. Kalra
CMAArunava Chakraborty
CMA Md. Rehan
Chakraborty Kapoor & CO. LLP
Mob: +91-9911299105, +91-9990837823,
+91- 011-26275907
Email : cma.rehan@gmail.com
Website: www.cmackc.com
Address : F-1210, LGF, Chirtanjan Park, New Delhi, 110019