Home › CA Final › indirecttaxlaws › Input Tax Credit › Sec 16(2) prescribes four conditions for availin…
Sec 16(2) prescribes four conditions for availing ITC. Which is NOT one of them?
ARecipient must be in possession of tax invoice / debit note
BRecipient has received the goods / services
CRecipient must have a turnover of at least Rs 20 lakh
DTax charged has been paid to the Government by the supplier (Sec 16(2)(c))
Answer & Solution
Correct answer: C. Recipient must have a turnover of at least Rs 20 lakh
1. Sec 16(2) lists four conditions: (a) possession of tax invoice; (b) details furnished in GSTR-1 and appearing in GSTR-2B (Sec 16(2)(aa)); (c) receipt of supply; (d) tax has been paid to Govt; (e) return filed.
2. Turnover threshold is for registration (Sec 22), not for ITC entitlement.
3. All registered persons (above or below threshold who voluntarily registered) can claim ITC.
_Source: ICAI BoS CA Final Paper 8, Ch 6 "Input Tax Credit", §Sec 16(2)_
Related questions
Y Ltd received an invoice dated 15 March 2024 with GST of Rs 18,000. Y Ltd. forgot to claiSection 18(3) — transfer of unutilised ITC on SALE / MERGER / AMALGAMATION / LEASE / TRANSCGST credit can be utilised for payment of:Sec 16(2)(d) — fourth condition for availing ITC:Sec 16(4) — time limit for availing ITC for a particular financial year is the EARLIER of:Sec 16(2)(c) — ITC is conditional upon tax being PAID by the supplier to the Government. CSec 19(3) — inputs sent for JOB WORK must be returned (or supplied from job-worker's premiSec 18(1)(a) — a person who becomes liable to register and obtains registration is entitle