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2020 ] GST SECTION 16(4) — TIME-LIMIT FOR AVAILMENT OF ITC — AN OVERVIEW J75
payer. The very purpose of credit is to give benefit to the assessee and a right
accrued to the assessee on the date when they paid the tax on the raw materials
or the inputs should be available to the taxpayers. Support for the proposition
can be referred to the Hon’ble Supreme Court decision in the case of Eicher Mo-
tors Ltd. v. Union of India - 1999 (106) E.L.T. 3 (S.C.).
Further, Section 41 of the CGST Act, 2017 prescribed that every regis-
tered person, shall subject to such conditions and restrictions as may be pre-
scribed, be entitled to take credit eligible input tax, as self-assessed, in his return
and such amount shall be credited on a provisional basis to his electronic credit
ledger and the registered person shall be utilised only for payment of self-
assessed output tax. Therefore, ITC is a property or cash in hand and said prop-
erty cannot be denied by way of not allowing the credit merely due to time-
related procedural limitations. It is to be mentioned that Article 300A of the Con-
stitution of India provides that no person shall be deprived of his property save
by the authority of law. It is rightly held by the Hon’ble Supreme Court in the
case of Collector of Central Excise, Pune v. Dai Ichi Karkaria Ltd., reported in 1999
(112) E.L.T. 353 (S.C.), that
“We are here really concerned with credit that has been validly taken, and its
benefit is available to the manufacturer without any limitation in time or oth-
erwise unless the manufacturer itself chooses not to use the raw material in
its excisable product. The credit is, therefore, indefeasible. It should also be
noted that there is no co-relation of the raw material and the final product;
that is to say, it is not as if credit can be taken only on a final product that is
manufactured out of the particular raw material to which the credit is related.
The credit may be taken against the excise duty on a final product manufac-
tured on the very day that it becomes available.”
Conclusion :
To summarize, Section 16(1) provides that a registered person is “enti-
tled to take” credit of the tax paid on any supply of goods or services or both
which are used or intended to be used in the course or furtherance of business
and the said amount of ITC shall be credited to the electronic credit ledger of the
registered person. Section 16(2) prescribed that a registered person have to satis-
fy four eligibility conditions for taking input tax credit (such as possession of du-
ty paying documents under Rule 36(1), receipt of goods or services, tax paid by
the supplier to the Government and return furnished by the registered person
under Section 39 i.e. GSTR-3B) and once the registered person satisfy the said
conditions, he is entitled to take credit in the electronic credit ledger in respect of
supply of goods or services or both. By this provision, Section 16(2) overrides
Section 16(4). Thus, in the absence of time-limit as one of the conditions in Sec-
tion 16(2) ITC should be available to registered person even beyond the time lim-
it. With regard to non-furnishing of details of invoices/debit notes after due date
furnishing of returns under Section 39 for the month of September from the end
of financial year to which invoices pertains is the only procedural lapses. For
which a registered person should not be denied substantial benefit, hence ITC
should be available even if the same is claimed beyond the stipulated limit pre-
scribed under Section 16(4) of the CGST Act, 2017.

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