Section 16, Central Goods and Services Tax Act, 2017 [S10-6GZ]
As at 1 October 2022. In force from 1 July 2017 by Notification No. 9/2017-Central Tax, dated 28-6-2017 [N10-27X].
16. Eligibility and conditions for taking input tax credit.—
(1) Every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person.
(2) Notwithstanding anything contained in this section, no registered person shall be entitled to the credit of any input tax in respect of any supply of goods or services or both to him unless,-
(a) he is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying documents as may be prescribed;
(aa) the details of the invoice or debit note referred to in clause (a) has been furnished by the supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note in the manner specified under section 37;
(b) he has received the goods or services or both.
Explanation.- For the purposes of this clause, it shall be deemed that the registered person has received the goods or, as the case may be, services-
(i) where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise;
(ii) where the services are provided by the supplier to any person on the direction of and on account of such registered person;
(ba) the details of input tax credit in respect of the said supply communicated to such registered person under section 38 has not been restricted;
(c) subject to the provisions of section 41 ***, the tax charged in respect of such supply has been actually paid to the Government, either in cash or through utilisation of input tax credit admissible in respect of the said supply; and
(d) he has furnished the return under section 39:
Provided that where the goods against an invoice are received in lots or instalments, the registered person shall be entitled to take credit upon receipt of the last lot or instalment:
Provided further that where a recipient fails to pay to the supplier of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, the amount towards the value of supply along with tax payable thereon within a period of one hundred and eighty days from the date of issue of invoice by the supplier, an amount equal to the input tax credit availed by the recipient shall be added to his output tax liability, along with interest thereon, in such manner as may be prescribed:
Provided also that the recipient shall be entitled to avail of the credit of input tax on payment made by him of the amount towards the value of supply of goods or services or both along with tax payable thereon.
(3) Where the registered person has claimed depreciation on the tax component of the cost of capital goods and plant and machinery under the provisions of the Income tax Act, 1961 (43 of 1961), the input tax credit on the said tax component shall not be allowed.
(4) A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the thirtieth day of November following the end of financial year to which such invoice or **** debit note pertains or furnishing of the relevant annual return, whichever is earlier.
Provided that the registered person shall be entitled to take input tax credit after the due date of furnishing of the return under section 39 for the month of September, 2018 till the due date of furnishing of the return under the said section for the month of March, 2019 in respect of any invoice or invoice relating to such debit note for supply of goods or services or both made during the financial year 2017-18, the details of which have been uploaded by the supplier under sub-section (1) of section 37 till the due date for furnishing the details under sub-section (1) of said section for the month of March, 2019.
Defined terms in this text (21)
act: Section 3, General Clauses Act, 1897 [S100SN] (In this Act, and in all Central Acts and Regulations made after the commencement of this Act, unless there is anything repugnant in the subject or context): (2) "act", used with reference to an offence or a civil wrong, shall include a series of acts, and words which refer to acts done extend also to illegal omissions;
act: 363 more definitions.
business: Section 2(17), Central Goods and Services Tax Act, 2017: "business" includes - (a) any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit; (b) any activity or transaction in connection with or incidental or ancillary to sub-clause (a); (c) any activity or transaction in the nature of sub-clause (a), whether or not there is volume, frequency, continuity or regularity of such transaction; (d) supply or acquisition of goods including capital goods and services in connection with commencement or closure of business; (e) provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members; (f) admission, for a consideration, of persons to any premises; (g) services supplied by a person as the holder of an office which has been accepted by him in the course or furtherance of his trade, profession or vocation; (h) activities of a race club including by way of totalisator or a license to book maker or activities of a licensed book maker in such club; and (i) any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities;
business: 13 more definitions.
Court: Section 2, Indian Tolls Act, 1851 [S11B35] (In this Act, unless the context otherwise requires,—): "court" means a court of civil jurisdiction and includes a tribunal constituted under this Act
Court: Section 2, Indian Tolls Act, 1864 [S12AQM] (In this Act, unless the context otherwise requires,—): "court" means a court of civil jurisdiction and includes a tribunal constituted under this Act
Court: Section 2, Bombay Civil Courts Act, 1869 [S12EXG] (In this Act, unless the context otherwise requires,—): "court" means a court of civil jurisdiction and includes a tribunal constituted under this Act
Court: 47 more definitions.
document: Section 3, General Clauses Act, 1897 [S100SN] (In this Act, and in all Central Acts and Regulations made after the commencement of this Act, unless there is anything repugnant in the subject or context): "document" shall include any matter written, expressed or described upon any substance by means of letters, figures or marks, or by more than one of those means which is intended to be used, or which may be used, for the purpose of recording that matter
financial year: Section 3, General Clauses Act, 1897 [S100SN] (In this Act, and in all Central Acts and Regulations made after the commencement of this Act, unless there is anything repugnant in the subject or context): (21) "financial year" shall mean the year commencing on the first day of April; (22) a thing shall be deemed to be done in "good faith" where it is in fact done honesty, whether it is done negligently or not;
financial year: 22 more definitions.
goods: Section 2, Central Goods and Services Tax Act, 2017 [S1061R] (In this Act, unless the context otherwise requires): "goods" means every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply
goods: 38 more definitions.
Government: Section 3, General Clauses Act, 1897 [S100SN] (In this Act, and in all Central Acts and Regulations made after the commencement of this Act, unless there is anything repugnant in the subject or context): (23) "Government" or the Government shall include both the Central Government and any State Government;
income: Section 2(24), IT Act 1961: "income" includes- (i) profits and gains; (ii) dividend; (iia) voluntary contributions received by a trust created wholly or partly for charitable or religious purposes [...]; (iii) the value of any perquisite or profit in lieu of salary taxable under clause (2) [...] of section 17; (iiia) any special allowance or benefit [...]; (iiib) any allowance granted to the assessee either to meet his personal expenses [...]; (iv) the value of any benefit or perquisite, whether convertible into money or not [...]; (v) any sum chargeable to income-tax under clauses (ii) and (iii) of section 28 or section 41 or section 59; (va) to (ve) any sum chargeable to income-tax under clauses (iiia) to (v) of section 28; (vi) any capital gains chargeable under section 45; (vii) the profits and gains of any business of insurance carried on by a mutual insurance company or by a co-operative society [...]; (viia) the profits and gains of any business of banking (including providing credit facilities) carried on by a co-operative society with its members; (ix) any winnings from lotteries, crossword puzzles, races including horse races, card games and other games of any sort or from gambling or betting of any form or nature whatsoever [...]; (x) any sum received by the assessee from his employees as contributions to any provident fund or superannuation fund [...]; (xi) any sum received under a Keyman insurance policy [...]; (xii) any sum referred to in clause (va) of section 28; (xiia) the fair market value of inventory referred to in clause (via) of section 28; (xiii) to (xviib) any sum or property referred to in the specified clauses of sub-section (2) of section 56; (xviii) assistance in the form of a subsidy or grant or cash incentive or duty drawback or waiver or concession or reimbursement (by whatever name called) by the Central Government or a State Government or any authority or body or agency in cash or kind to the assessee [...];
input tax credit: Section 2(63), Central Goods and Services Tax Act, 2017: "input tax credit" means the credit of input tax;
month: Section 3, General Clauses Act, 1897 [S100SN] (In this Act, and in all Central Acts and Regulations made after the commencement of this Act, unless there is anything repugnant in the subject or context): "month" shall mean a month reckoned according to the British calendar
person: Section 3, General Clauses Act, 1897 [S100SN] (In this Act, and in all Central Acts and Regulations made after the commencement of this Act, unless there is anything repugnant in the subject or context): "person" shall include any company or association or body of individuals, whether incorporated or not
person: 1 more definition.
recipient: Section 2(93), Central Goods and Services Tax Act, 2017: "recipient" of supply of goods or services or both, means— (a) where a consideration is payable for the supply of goods or services or both, the person who is liable to pay that consideration; (b) where no consideration is payable for the supply of goods, the person to whom the goods are delivered or made available, or to whom possession or use of the goods is given or made available; and (c) where no consideration is payable for the supply of a service, the person to whom the service is rendered, and any reference to a person to whom a supply is made shall be construed as a reference to the recipient of the supply and shall include an agent acting as such on behalf of the recipient in relation to the goods or services or both supplied;
registered: Section 3, General Clauses Act, 1897 [S100SN] (In this Act, and in all Central Acts and Regulations made after the commencement of this Act, unless there is anything repugnant in the subject or context): (49) "registered", used with reference to a document, shall mean registered in India under the law for the time being in force for the registration of documents;
registered person: Section 2(94), Central Goods and Services Tax Act, 2017: "registered person" means a person who is registered under section 25 but does not include a person having a Unique Identity Number;
reverse charge: Section 2(98), Central Goods and Services Tax Act, 2017: "reverse charge" means the liability to pay tax by the recipient of supply of goods or services or both instead of the supplier of such goods or services or both under sub-section (3) or sub-section (4) of section 9, or under sub-section (3) or sub-section (4) of section 5 of the Integrated Goods and Services Tax Act;
section: Section 3, General Clauses Act, 1897 [S100SN] (In this Act, and in all Central Acts and Regulations made after the commencement of this Act, unless there is anything repugnant in the subject or context): (54) "section" shall mean a section of the Act or Regulation in which the word occurs;
section: 363 more definitions.
sub-section: Section 3, General Clauses Act, 1897 [S100SN] (In this Act, and in all Central Acts and Regulations made after the commencement of this Act, unless there is anything repugnant in the subject or context): (61) "sub-section" shall mean a sub-section of the section in which the word occurs;
supplier: Section 2(105), Central Goods and Services Tax Act, 2017: "supplier" in relation to any goods or services or both, shall mean the person supplying the said goods or services or both and shall include an agent acting as such on behalf of such supplier in relation to the goods or services or both supplied; Provided that a person who organises or arranges, directly or indirectly, supply of specified actionable claims, including a person who owns, operates or manages digital or electronic platform for such supply, shall be deemed to be a supplier of such actionable claims, whether such actionable claims are supplied by him or through him and whether consideration in money or money's worth, including virtual digital assets, for supply of such actionable claims is paid or conveyed to him or through him or placed at his disposal in any manner, and all the provisions of this Act shall apply to such supplier of specified actionable claims, as if he is the supplier liable to pay the tax in relation to the supply of such actionable claims.
supply: Section 7(1), Central Goods and Services Tax Act, 2017: "For the purposes of this Act, the expression - "supply" includes- (a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business; (aa) the activities or transactions, by a person, other than an individual, to its members or constituents or vice-versa, for cash, deferred payment or other valuable consideration. Explanation.-For the purposes of this clause, it is hereby clarified that, notwithstanding anything contained in any other law for the time being in force or any judgment, decree or order of any Court, tribunal or authority, the person and its members or constituents shall be deemed to be two separate persons and the supply of activities or transactions inter se shall be deemed to take place from one such person to another; (b) import of services for a consideration whether or not in the course or furtherance of business; and (c) the activities specified in Schedule I, made or agreed to be made without a consideration."
value: Section 2(41), Customs Act, 1962: "value", in relation to any goods, means the value thereof determined in accordance with the provisions of sub-section (1) or sub-section (2) of section 14;
year: Section 3, General Clauses Act, 1897 [S100SN] (In this Act, and in all Central Acts and Regulations made after the commencement of this Act, unless there is anything repugnant in the subject or context): "year" shall mean a year reckoned according to the British calendar
Made under this section, or naming it (56)
Notification No. 2/2019-Central Tax (Rate) [N10-FSN], 7 March 2019, in force. Recital: "In exercise of the powers conferred by sub-section (1) of section 9, sub- section (1) of section 11, sub-section (1) of section 16 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (herein after referred to as the “said Act”), the Central Government, on the recommendations of the Council, and on being satisfied that it is necessary in the public interest so to do"
Notification No. 02/2021-Central Tax (Rate) [N10-SPS], 2 June 2021, in force. Recital: "In exercise of the powers conferred by sub-section (1), sub-section (3) and sub-section (4) of section 9, sub-section (1) of section 11, sub-section (5) of section 15, sub-section (1) of section 16 and section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council"
Notification No. 03/2019-Central Tax (Rate) [N10-FYV], 29 March 2019, in force. Recital: "In exercise of the powers conferred by sub-sections (1), (3) and (4) of section 9, sub-section (1) of section 11, sub-section (5) of section 15, sub-section (1) of section 16 and section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, and on being satisfied that it is necessary in the public interest so to do"
Notification No. 03/2022-Central Tax (Rate) [N10-X6C], 13 July 2022, in force. Recital: "In exercise of the powers conferred by sub-section (1), sub-section (3) and sub- section (4) of section 9, sub-section (1) of section 11, sub-section (5) of section 15, sub-section (1) of section 16 and section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council"
Notification No. 04/2021-Central Tax (Rate) [N10-SXF], 14 June 2021, in force. Recital: "In exercise of the powers conferred by sub-section (1), sub-section (3) and sub-section (4) of section 9, sub-section (1) of section 11, sub-section (5) of section 15, sub-section (1) of section 16 and section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, and on being satisfied that it is necessary in the public interest so to do"
Notification No. 05/2023-Central Tax (Rate) [N10-ZDJ], 9 May 2023, in force. Recital: "In exercise of the powers conferred by sub-section (1), sub-section (3) and sub-section (4) of section 9, sub-section (1) of section 11, sub-section (5) of section 15, sub-section (1) of section 16 and section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council"
Notification No. 06/2021-Central Tax (Rate) [N10-TR9], 30 September 2021, in force. Recital: "In exercise of the powers conferred by sub-section (1), sub-section (3) and sub-section (4) of section 9, sub-section (1) of section 11, sub-section (5) of section 15, sub- section (1) of section 16 and section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council"
Notification No. 06/2023-Central Tax (Rate) [N11-05S], 26 July 2023, in force. Recital: "In exercise of the powers conferred by sub-section (1), sub-section (3) and sub-section (4) of section 9, sub-section (1) of section 11, sub-section (5) of section 15, sub-section (1) of section 16 and section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council"
Notification No. 07/2024-Central Tax (Rate) [N11-3Z4], 8 October 2024, in force. Recital: "In exercise of the powers conferred by sub-section (1), sub-sections (3) and (4) of section 9, sub-section (1) of section 11, sub-section (5) of section 15, sub-section (1) of section 16 and section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council"
Notification No. 9/2019-Central Tax (Rate) [N10-GGM], 29 March 2019, in force. Recital: "In exercise of the powers conferred by sub-section (1) of section 9, sub- section (1) of section 11, sub-section (1) of section 16 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (herein after referred to as the “said Act”), the Central Government, on the recommendations of the Council, and on being satisfied that it is necessary in the public interest so to do"
Notification No. 10/2019-Central Tax (Rate) [N10-GV2], 10 May 2019, in force. Recital: "In exercise of the powers conferred by sub-sections (1), (3)and (4) of section 9, sub-section (1) of section 11,sub-section (5) of section 15, sub-section (1) of section 16 and section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, and on being satisfied that it is necessary in the public interest so to do"
Notification No. 12/2023-Central Tax (Rate) [N11-1HG], 19 October 2023, in force. Recital: "In exercise of the powers conferred by sub-section (1), sub-section (3) and sub-section (4) of section 9, sub-section (1) of section 11, sub-section (5) of section 15, sub-section (1) of section 16 and section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council"
Notification No. 15/2021-Central Tax (Rate) [N10-VAC], 18 November 2021, in force. Recital: "In exercise of the powers conferred by sub-section (1), sub-section (3) and sub-section (4) of section 9, sub-section (1) of section 11, sub-section (5) of section 15, sub-section (1) of section 16 and section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council"
Notification No. 15/2025-Central Tax (Rate) [N11-6BX], 17 September 2025, in force. Recital: "In exercise of the powers conferred by sub-sections (1), (3), and (4) of section 9, sub-sections (1) and (3) of section 11, sub-section (5) of section 15, sub-section (1) of section 16 and section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council"
Notification No. 18/2019-Central Tax (Rate) [N10-JE5], 30 September 2019, in force. Recital: "In exercise of the powers conferred by sub-section (1) of section 9, sub-section (1) of section 11, sub-section (1) of section 16 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, and on being satisfied that it is necessary in the public interest so to do"
Notification No. 20/2019-Central Tax (Rate) [N10-JNP], 30 September 2019, in force. Recital: "In exercise of the powers conferred by sub-sections (1), (3) and (4) of section 9, sub-section (1) of section 11, sub-section (5) of section 15, sub-section (1) of section 16 and section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, and on being satisfied that it is necessary in the public interest so to do"
Notification No. 22/2021-Central Tax (Rate) [N10-W4C], 31 December 2021, in force. Recital: "In exercise of the powers conferred by sub-section (1), sub-section (3) and sub-section (4) of section 9, sub-section (1) of section 11, sub-section (5) of section 15, sub-section (1) of section 16 and section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, and in supersession of notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 15/2021 – Central Tax(Rate), dated the 18th November, 2021, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 807(E), dated the 18 th November, 2021"
Circular No. 178/10/2022-GST [C10-63Q], 3 August 2022, in force. The text contains "section 16 of the said Act".
Circular No. 183/15/2022-GST [C10-681], 27 December 2022, in force. The text contains "Section 16 of the Central Goods and Services Tax Act, 2017".
Circular No. 237/31/2024-GST [C10-7ZE], 15 October 2024, in force. The text contains "sub-section (4) of section 16 of the said Act".
Circular No. 241/35/2024-GST [C10-844], 31 December 2024, in force. The text contains "section 16 of the Central Goods and Services Tax Act, 2017".
Notification No. 11/2020-Central Tax [N10-N7B], 21 March 2020, in force. The text contains "sub-section (4) of section 16 of the said Act".
Notification No. 22/2024-CENTRAL TAX [N11-3QM], 8 October 2024, in force. The text contains "sub-section (6) of section 16 of the said Act".
Notification No. 1/2018-Central Tax (Rate) [N10-96P], 25 January 2018, in force. The text contains "sub-section (1) of section 16 of the Central Goods and Services Tax Act, 2017".
Notification No. 02/2022-Central Tax (Rate) [N10-WDY], 31 March 2022, in force. The text contains "sub-section (1) of section 16 of the Central Goods and Services Tax Act, 2017".
Cited by (5)
Section 17, Central Goods and Services Tax Act, 2017 [S10-6HX], 12 April 2017, Band A. "section 16".
Section 19, Central Goods and Services Tax Act, 2017 [S10-6KS], 12 April 2017, Band A. "section 16".
Rule 21, Central Goods and Services Tax Rules, 2017 [S10-DHM], 19 June 2017, Band A. "section 16".
Rule 37, Central Goods and Services Tax Rules, 2017 [S10-E7H], 19 June 2017, Band A. "section 16".
Rule 43, Central Goods and Services Tax Rules, 2017 [S10-EF1], 19 June 2017, Band A. "section 16".
Not held (0)
none
Duties published under this section (0)
none