Section 16 (4): Will Delayed filing of return cost the availability of ITC to Defaulters?



Quick Summary
Section 16(4) of the CGST Act, 2017, can lead to the disallowance of Input Tax Credit (ITC) if GST returns are filed late. This includes situations where GSTR 3B is filed after the deadline or ITC for a specific period is claimed beyond the stipulated time. The interpretation and application of this section have led to differing views among High Courts, with some rulings favouring taxpayers and others disallowing ITC. The matter is currently before the Supreme Court, and taxpayers are advised to file returns promptly to avoid litigation.

Section 16(4) of the CGST Act, 2017 sounds like a nightmare to taxpayers whose Input Tax Credit is disallowed by the Department. The significance of the Section had not been realised by the taxpayers till the time they started receiving notices from the Tax Authorities. The Department has been levyi
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Rovin Kothari & Associates

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