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Sec 18(2) — ITC under Sec 18(1) cannot be availed in respect of any supply of goods/services after the expiry of:
A1 year from date of issue of tax invoice relating to such supply
B6 months from date of invoice
C30 days
DEnd of the FY
Answer & Solution
Correct answer: A. 1 year from date of issue of tax invoice relating to such supply
1. Sec 18(2) sets a time limit on the credit allowed under Sec 18(1) (new registrations, voluntary registrations, switching from composition).
2. Credit cannot be claimed after the expiry of 1 year from the date of issue of the tax invoice relating to such supply.
3. After 1 year, the input is too old to bring into the credit chain.
_Source: ICAI BoS CA Final Paper 8, Ch 6 "Input Tax Credit", §Sec 18(2)_
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