The Central Board of Indirect Taxes and Customs (CBIC) has issued Circular No. 237/31/2024-GST dated 15 October 2024, clarifying the manner of implementation of sub-section (5) and sub-section (6) of section 16 of the CGST Act, which were inserted retrospectively by the Finance (No. 2) Act, 2024.
These amendments provide relief in cases where input tax credit (ITC) was denied solely on account of the time limit prescribed under section 16(4) of the CGST Act.
Key clarifications:
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ITC relating to FY 2017-18 to FY 2020-21 can be availed if returns were filed up to 30 November 2021, in terms of section 16(5).
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Registered persons whose GST registration was cancelled and subsequently revoked may avail eligible ITC under section 16(6), subject to prescribed conditions.
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The amendments apply retrospectively from 01 July 2017.
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No refund shall be granted for tax already paid or ITC already reversed due to earlier restriction under section 16(4).
Impact on ongoing and concluded proceedings:
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Where proceedings are pending (investigation, adjudication, appeal or revision), authorities are required to apply the amended provisions while passing orders.
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In cases where orders have already been passed and no appeal was filed, taxpayers may seek rectification under the special procedure notified under section 148 of the CGST Act, within the prescribed time limit.
The circular aims to ensure uniform implementation of the retrospective ITC relief provisions across field formations and to provide procedural clarity to taxpayers and tax authorities.