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CS Professional · Goods and Services Tax (GST) and Corporate Tax Planning · Input Tax Credit and Computation of GST Liability

Kapoor Auto Ltd has an invoice of ₹5,00,000 plus IGST of ₹90,000 from a supplier, dated 15 January 2025, which falls in financial year 2024-25. All other conditions of section 16(2) are met. Ignoring any other relaxation, by which date must Kapoor take the credit, assuming the annual return is not furnished earlier?

Kapoor must take the credit by 30 November 2025. Section 16(4) bars credit after the thirtieth day of November following the end of the financial year to which the invoice pertains, or the furnishing of the annual return, whichever is earlier.

  1. A30 November 2025Correct
  2. B30 September 2025
  3. C31 March 2026
  4. D30 November 2026

Explanation

Under section 16(4), credit cannot be taken after the thirtieth day of November following the end of the financial year to which the invoice pertains, or the furnishing of the annual return, whichever is earlier. The financial year ends on 31 March 2025, so the limit is 30 November 2025. The date of 30 September is the old September return rule that was replaced.

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