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Section 16(1) of the CGST Act provides the basic entitlement to ITC. A registered person is entitled to ITC on supplies which are:
AUsed for personal consumption
BUsed or intended to be used in the course or furtherance of business
CUsed by employees outside office
DUsed for any purpose with consideration
Answer & Solution
Correct answer: B. Used or intended to be used in the course or furtherance of business
1. Sec 16(1) — every registered person is entitled to take ITC on any supply of goods or services or both used or intended to be used in the course or furtherance of business.
2. Credit must be credited to his electronic credit ledger.
3. Credit is subject to conditions in Sec 16(2) and restrictions in Sec 17.
_Source: ICAI BoS CA Final Paper 8, Ch 6 "Input Tax Credit", §Sec 16(1)_
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