GST Payers Entitled to avail ITC for FYs 2017-18 to 2020-21 on GSTR-3B Filed on or before 30.11.2021: Madras HC [Read Order]
Section 16(5) of the CGST Act, inserted retrospectively with effect from 1 July 2017 by the Finance Act (No.2) of 2024, permits ITC claims for FYs 2017-18 to 2020-21 if the relevant GSTR-3B returns were filed up to 30 November 2021.
GSTR3B - ITC - Taxscan
GSTR3B - ITC - Taxscan
The Madras High Court has reasserted that registered taxpayers are entitled to claim Input Tax Credit (ITC) for the financial years 2017-18 to 2020-21, provided their GSTR-3B returns were filed on or before 30 November 2021.
Justice Krishnan Ramasamy quashed the GST assessment order passed for FY 2018-19, holding that denial of ITC on limitation grounds under Section 16(4) of theCGST Act was unsustainable in light of subsequent legislative amendments.
The petitioner, Power Builders is a partnership firm, had challenged an Order-in-Original dated 10 April 2024 that reversed ITC and imposed tax, interest, and penalty on the ground that the claim was time-barred under Section 16(4).
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During the hearing, it was pointed out that the issue had already been settled in a batch of writ petitions decided on 17 October 2024, wherein the earlier bench held that Section 16(5) of the CGST Act, inserted retrospectively with effect from 1 July 2017 by the Finance Act (No.2) of 2024, permits ITC claims for FYs 2017-18 to 2020-21 if the relevant GSTR-3B returns were filed up to 30 November 2021.
In the earlier ruling, it was noted that the amendment was backed by the 53rd GST Council Meeting recommendation of 22 June 2024, Presidential assent on 16 August 2024, and subsequent CBIC Notification No.17/2024-Central Tax dated 27 September 2024, followed by Circular No.237/31/2024-GST. Together, these clarified that taxpayers cannot be denied ITC merely for not meeting the earlier deadline when returns were filed within the extended statutory window.
Accordingly, the High Court quashed the assessment order insofar as it related to the limitation issue, barred the Department from pursuing recovery based on the same, and directed immediate steps to defreeze the petitioner’s bank accounts if frozen.
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It was further held that any tax amounts collected under the impugned order must be refunded or re-credited to the assessee’s cash/credit ledgers for adjustment against future liabilities.
However, the Court clarified that this relief applies only to cases involving denial of ITC on limitation grounds. Where other issues such as wrong availment, discrepancies, or fake ITC are involved, the Department retains the liberty to proceed in accordance with law.
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