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In layman's language, "Input Tax Credit" ('ITC') means that "taxpayer can reduce his output tax liability to the extent of GST paid on procurements".

Input Tax Credit in GST regime: Deep dive into its enthralling aspects

But is this concept that straight!!! The concept of ITC was supposed to be the simplest one viz. GST on every procurement should have been available as ITC. On the contrary, this is becoming an area of utter confusion for every taxpayer and the confusion is multiplying with each passing day. This is because of aspects ranging from the eligibility, restrictions, reversal of ITC in special cases and so on. Even for the Government, this is a revenue garner as every ITC denial adds to their tax kitty. Prior to introduction of GST as well, CENVAT / Modvat used to be the most disputed area in Indirect Taxes.

One cannot forget about the taxpayers and department being at loggerheads on the time limit of availing ITC. For the taxpayers, last date for availing ITC was date of filing annual return since GSTR-3 was not in operation. This was also held by the Gujarat High Court in the case of AAP & Company. But one fine day (i.e. October 9, 2019), the Government brought an amendment vide Notification No. 49/2019-Central Tax making Form GSTR-3B as a return under Section 39(1) of the CGST Act when due date of filing Form GSTR-1 or Form GSTR-2 is extended. Interestingly, this amendment is effective retrospectively from July 1, 2017. This amendment forces one to ponder over the following points:

• Is a taxpayer required to reverse ITC of FY 2017-18 availed post April 20, 2019?
• If yes (for above), is there any liability to pay interest on such reversal of ITC?
• Till when a taxpayer can avail ITC of FY 2018-19?

Well, the Government's zeal did not end here. The recent introduction of '20% restriction on availing ITC on invoices not uploaded' is 'the icing on the cake'. This cap was supposed to be introduced in new GST returns. But the Government got sentimental about our customary quote 'शुभकाममेंदेरीकैसी.....' Despite the new GST returns getting deferred till April 2020, the Government introduced this cap. Don't you feel this has invited multiple operational challenges in its compliance!!! Now, how should a taxpayer deal with such provision?

We all believe that -

".....Pearls don't lie on the seashore. If you want one, you must dive for it.....!!"

Indeed, ITC is a thought-provoking concept. Above instances just mark the beginning of our discussion. There are lot more interesting issues to be pondered under ITC.

To have an in-depth legal and practical understanding about the topic, please join us in our live interactive webinar with a renowned expert in Indirect Taxes - Mr. Puneet Bansal (Managing Partner, NITYA Tax Associates) .

The webinar will be held on November 16, 2019. It will be a 3-hour interactive session, covering the complete concept of ITC and an extensive discussion on the practical aspects, including a dedicated Q&A session at the end.


We will cover all legal provisions along with illustrations and legal precedents on the following:


• Eligibility
• Applicable restrictions
• Conditions for availment of ITC
• Time limit for claiming ITC
• Reversal of ITC

Note: The session will cover all amendments in law pertaining to ITC till October 2019.

Faculty Profile:

Puneet has over 20 years of experience in advising leading Multinational and Indian companies in setting up operations in India, structuring business models and supply chain, optimizing tax exposures and contract reviews from the perspective of Indirect tax laws

• Puneet has a rich experience in litigation and has successfully represented clients' interests before various judicial fora across India

• Puneet regularly addresses seminars/ workshops across India on diverse Indirect Tax issues. He actively contributes articles on emerging controversies on renowned tax portals

• Prior to starting NITYA, Puneet was a Partner with BMR & Associates LLP and Lakshmikumaran & Sridharan in their Indirect Tax practice


• Puneet is a member of the Institute of Chartered Accountants of India, having held All India merit position in CA Final. He also holds bachelor's degrees in Commerce and Law


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Puneet Bansal
Category GST   Report

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