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CS Executive · Tax Laws and Practice · Input Tax Credit and Computation of GST Liability

Under section 41(1) of the CGST Act, 2017, how is eligible input tax credit availed by a registered person?

A registered person avails eligible input tax credit on a self-assessed basis in the return, and the amount is credited to the electronic credit ledger. This is subject to prescribed conditions and restrictions under section 41(1). No prior officer approval or cash refund is needed.

  1. ACredit is availed by applying to the proper officer for approval of each invoice
  2. BCredit is availed only after the supplier's assessment is completed
  3. CCredit is availed as self-assessed in the person's return and credited to the electronic credit ledger, subject to prescribed conditions and restrictionsCorrect
  4. DCredit is paid out directly in cash by the Government

Explanation

Section 41(1) entitles every registered person, subject to prescribed conditions and restrictions, to avail eligible input tax credit as self-assessed in the return, with the amount credited to the electronic credit ledger. No officer approval or cash payment is involved.

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