☐ Is recipient registered? ☐ Is tax invoice in possession? ☐ Has supplier reported in GSTR-1? ☐ Is invoice reflected in GSTR-2B? ☐ Have goods / services been received? ☐ Is s. 38 non-restriction satisfied? ☐ Has supplier paid tax to…
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☐ Is recipient registered? ☐ Is tax invoice in possession? ☐ Has supplier reported in GSTR-1? ☐ Is invoice reflected in GSTR-2B? ☐ Have goods / services been received? ☐ Is s. 38 non-restriction satisfied? ☐ Has supplier paid tax to…
Section 16 ITC eligibility — checklist (19 items)
Section 16 ITC eligibility — checklist (19 items)
☐ Is recipient registered?
☐ Is tax invoice in possession?
☐ Has supplier reported in GSTR-1?
☐ Is invoice reflected in GSTR-2B?
☐ Have goods / services been received?
☐ Is s. 38 non-restriction satisfied?
☐ Has supplier paid tax to Government?
☐ Has recipient filed return under s. 39?
☐ Has business-use nexus been verified?
☐ Has 180-day supplier-payment window been tracked?
☐ For capital goods, has depreciation decision been coordinated?
☐ Has 30-November outer limit been observed?
☐ Has documentary trail of all conditions been preserved?
☐ Has Bharti Airtel substance-over-form discipline been applied?
☐ Has Mafatlal procedural-fairness framework been observed?
☐ Has Mohit Minerals constitutional framework been applied?
☐ Has Safari Retreats framework been considered for construction-input ITC?
☐ Has audit-defensibility through ITC file been ensured?
☐ Has the file been reviewed for audit-defensibility?
Worked examples — five live scenarios
Example 1 — Standard ITC claim
Facts: Taxpayer receives inputs Rs. 10 lakh + GST Rs. 1.8 lakh = Rs. 11.8 lakh. Tax invoice in possession; supplier reported in GSTR-1; goods received; payment made within 180 days; recipient's GSTR-3B filed.
Analysis: All five conditions satisfied. ITC Rs. 1.8 lakh available. Reflected in electronic credit ledger.
Result: Standard ITC claim valid.
Example 2 — Supplier-reporting default
Facts: Recipient paid supplier in full + received goods. Supplier did not report in GSTR-1. Recipient cannot reflect in GSTR-2B.
Analysis: Sub-s. (2)(aa) condition breached. ITC technically denied. HC line on bona-fide recipient — practitioner builds defence with payment records, receipt evidence, supplier communication. Departmental position may be ITC reversal + interest. Litigation path: writ for bona-fide-recipient framework.
Result: Bona-fide-recipient defence framework triggered.
Example 3 — 180-day reversal
Facts: Recipient took ITC on input received. Did not pay supplier within 180 days.
Analysis: Second proviso — ITC reversal + interest. Subsequent payment — re-availment permitted (Rule 37 framework).
Result: 180-day discipline operates.
Example 4 — Outer-limit breach
Facts: Invoice dated 15-Mar-2024 (FY 2023-24). Recipient discovered in Dec-2025; tries to claim ITC.
Analysis: Sub-s. (4) outer limit — 30-Nov-2024 or annual return date. Dec-2025 is beyond. ITC denied. No further remedy.
Result: Outer-limit discipline. Practitioner advice — timely claim discipline.
Example 5 — Depreciation-bar
Facts: Recipient bought capital goods Rs. 10 lakh + GST Rs. 1.8 lakh = Rs. 11.8 lakh. Treated entire Rs. 11.8 lakh as depreciable cost under Income-tax.
Analysis: Sub-s. (3) — depreciation on tax component triggers ITC denial. Either claim ITC on GST or depreciation on tax component — not both. Practitioner discipline — coordinate Income-tax + GST decisions for capital goods.
Result: No double benefit.
Planning and litigation strategy
Litigation defence
Cross-references