Ineligible input under section 16(4) and ITC Restricted due to POS provision

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Daya

Daya (Querist)
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15 July 2022 what are Ineligible ITC under section 16(4) and ITC restricted due to POS provisions . Please reply

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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18 July 2022 It is clarified that:
1. w.e.f. Jan 2021, in case of debit notes, the date of issuance of debit note (not the date of underlying invoice) shall determine the relevant financial year for the purpose of section 16(4) of the CGST Act.
2. The availment of ITC on debit notes in respect of amended provision shall be applicable from Jan 2021. Accordingly, for availment of ITC on or after Jan 2021, in respect of debit notes issued either prior to or after Jan 2021, the eligibility for availment of ITC will be governed by the amended provision of section 16(4), whereas any ITC availed prior to Jan 2021, in respect of debit notes, shall be governed under the provisions of section 16(4), as it existed before the said amendment on Jan 2021

The summarised position of the aforesaid clarification is as under –
a) After the amendment i.e. w.e.f. Jan 2021, in case of issuance of debit notes, the date of issuance of debit note (not the date of underlying invoice) shall determine the relevant financial year for the purpose of section 16(4) of the CGST Act.
b) In case of availment of ITC on or after Jan 2021, the eligibility for availment of ITC will be governed by the amended provision of section 16(4) of the CGST Act. It does not matter whether debit notes were issued either prior to or after Jan 2021.
c) In case of availment of ITC prior to Jan 2021, the eligibility for availment of ITC will be governed by the old provision of section 16(4) of the CGST Act i.e. before the amendment