Input Tax Credit (ITC) is a cornerstone of the Goods and Services Tax (GST) regime, enabling businesses to offset tax paid on inputs against their output tax liability and thereby preventing cascading taxation. However, the right to claim ITC is not unlimited.
The GST law prescribes a strict statutory time limit, beyond which credit relating to a particular financial year cannot be availed. This limitation is primarily governed by Section 16(4) of the Central Goods and Services Tax (CGST) Act, 2017, along with subsequent amendments and notifications issued by the Central Government.
Buy Now: E-Magazine: 500 Landmark GST Judgments (2018–2025)
Table of Contents
Statutory Provision: Section 16(4) of the CGST Act
Section 16 of the CGST Act lays down the eligibility and conditions for claiming ITC. Sub-section (4) specifically prescribes the outer time limit for availing credit on invoices or debit notes.
Under the present legal framework, a registered person cannot avail ITC after the earlier of the following two dates:
- 30 November following the end of the financial year to which the invoice or debit note pertains; or
- The date of filing the annual return (GSTR-9) for that financial year.
Once this deadline expires, the credit becomes time-barred, and the taxpayer loses the statutory right to claim ITC for that invoice.
Legislative Evolution of the ITC Time Limit
Original Provision under GST (2017)
When GST was introduced in July 2017, the time limit under Section 16(4) allowed ITC to be claimed up to the due date of filing the return for the month of September following the end of the financial year, or the date of filing the annual return, whichever was earlier.
In practice, this meant that taxpayers had to claim missed ITC before filing the September GSTR-3B return of the next financial year.
Amendment by the Finance Act, 2022
The Finance Act, 2022 amended Section 16(4) to extend the time limit and simplify the compliance framework. The amendment replaced the earlier “September return” deadline with a fixed date of 30 November following the end of the financial year.
The amendment was brought into effect through Notification No. 18/2022-Central Tax dated 28 September 2022, which notified 1 October 2022 as the effective date of the change.
This change effectively provided taxpayers additional time to reconcile purchase invoices and claim missed ITC.
Illustration of ITC Claim Deadline
| Financial Year of Invoice | Last Date to Claim ITC (Normal Case) |
| FY 2022–23 | 30 November 2023 |
| FY 2023–24 | 30 November 2024 |
| FY 2024–25 | 30 November 2025 |
However, if the taxpayer files GSTR-9 earlier than 30 November, the date of filing the annual return becomes the effective deadline.
Important Notifications and Amendments Related to ITC Time Limit
1. Notification No. 18/2022 – Central Tax (28 September 2022)
This notification implemented the amendment made by the Finance Act, 2022 and changed the time limit for claiming ITC from September return due date to 30 November of the succeeding financial year.
Key impact:
- Provided additional time for reconciliation of invoices
- Simplified the statutory deadline for claiming ITC.
2. Notification No. 39/2021 – Central Tax
This notification inserted Section 16(2)(aa), which requires that ITC can be claimed only when the supplier has furnished invoice details in GSTR-1, and such details are reflected in the recipient’s GSTR-2B.
This provision effectively linked the availability of ITC with invoice reporting by the supplier.
3. Notification No. 28/2023 – Central Tax
The government further amended provisions relating to ITC reversal and payment conditions, strengthening compliance requirements related to ITC availment.
Special Legislative Relief for Earlier Years
In subsequent amendments, the government introduced relief measures for taxpayers who could not claim ITC in the initial years of GST implementation. Amendments made through later finance legislation allowed extended time limits for claiming ITC for financial years 2017-18 to 2020-21, recognizing the difficulties faced during the early phase of GST rollout.
Conditions for Claiming ITC
Even within the statutory time limit, ITC can be availed only if the conditions under Section 16(2) are satisfied. These include:
- Possession of a valid tax invoice or debit note
- Receipt of goods or services
- Tax charged by the supplier has been actually paid to the government
- Supplier has furnished the invoice in GSTR-1
- The credit appears in the recipient’s GSTR-2B
- The recipient has filed the relevant GSTR-3B return
Failure to meet these conditions may lead to denial or reversal of ITC.
Judicial Interpretation
SC SEEKS DETAILS IN AFFIDAVIT FROM UOI ON COMPLIANCE WITH GST ITC TIMELINES
The Supreme Court directed the Union of India to submit detailed data on the level of compliance by assessees with the statutory timelines prescribed under the Goods and Services Tax (GST) law for availing Input Tax Credit (ITC).
The order came during the hearing of Bar Code India Ltd. vs. Union of India & Others (SLP (C) No. 7500/2025), which challenges a 2024 judgment of the Punjab and Haryana High Court concerning the interpretation of Section 16(4) read with Sections 37(3) and 39(9) of the Central Goods and Services Tax (CGST) Act, 2017.
GST ITC DENIAL BASED ON TIME LIMIT U/S 16(4) REVISITED AFTER INSERTION OF SECTION 16(5): JHARKHAND HC ORDERS FRESH APPELLATE REVIEW
The Jharkhand High Court in the case of Manoj Kumar Singh Versus Principal Commissioner W.P. (T) No. 7467 of 2025 has set aside an appellate order denying Input Tax Credit (ITC) under the Goods and Services Tax (GST) regime and remanded the matter for fresh consideration, taking into account subsequent statutory amendments and a clarificatory circular issued by the Central Board of Indirect Taxes and Customs (CBIC).
GST ITC | ONCE RETURNS SUBMITTED U/S 16(5), TIME LIMIT U/S 16(4) LOSES ITS SIGNIFICANCE: KERALA HC
In the case of Pazhassi Motors Versus State of Kerala WP(C) NO. 45451 OF 2025, the Kerala High Court while quashing the Input Tax Credit (ITC) denial, held that once the taxpayer submits returns within the period stipulated in Section 16(5), the time limit under Section 16(4) of the CGST Act loses its significance.
The bench of Justice Ziyad Rahman A.A. has observed that the claim now raised by the petitioner is based on a statutory provision that was introduced later, and it specifically provides for input tax credit, subject to the condition that the returns are filed before the 30th day of November, 2021. Apart from the fact that the returns are to be filed within the cut off date, no other conditions are imposed in Section 16(5), and it is also a relevant aspect to notice that Section 16(5) starts with the wording “notwithstanding anything contained in Subsection 4.”
BUY NOW: E-Magazine: Top 100 GST ITC Judgements (2024–25)
Compliance Challenges for Businesses
Despite the extended deadline, businesses often lose eligible ITC due to practical challenges such as:
- Delayed filing of returns by suppliers
- Mismatch between purchase records and GSTR-2B data
- Accounting or reconciliation errors
- Late discovery of invoices
- Technical issues on the GST portal
Tax professionals therefore recommend periodic reconciliation of purchase data with GSTR-2B and books of accounts well before the statutory deadline.
ALSO READ: YEAR-END GST PURCHASES: EXPERTS WARN AGAINST MISSTEPS IN CLAIMING INPUT TAX CREDIT
Conclusion
The GST law imposes a strict statutory time limit for claiming Input Tax Credit under Section 16(4) of the CGST Act. Following the amendment introduced through Notification No. 18/2022-Central Tax, the deadline is now 30 November of the succeeding financial year or the date of filing the annual return, whichever is earlier.
While the extended deadline has provided additional compliance flexibility, failure to claim ITC within the prescribed timeframe results in permanent loss of credit, making timely reconciliation and return filing critical for businesses operating under the GST regime.
