Under Section 16 CGST Act 2017, INPUT TAX CREDIT (ITC) is available subject to conditions including:
Answer & Solution
Correct answer: A.
1. Section 16 CGST Act 2017 prescribes ELIGIBILITY AND CONDITIONS for INPUT TAX CREDIT (ITC):
2. CONDITIONS:
3. (a) Recipient must POSSESS a TAX INVOICE / debit note;
4. (b) Recipient must have RECEIVED the goods or services;
5. (c) TAX must have actually been PAID by supplier to Government;
6. (d) Recipient must have FURNISHED RETURN under Section 39;
7. (e) Payment must be made to supplier within 180 DAYS of invoice (otherwise ITC reversed);
8. (f) ITC must be claimed within TIME LIMIT — earlier of 30 November of next FY or filing of annual return.
9. INELIGIBLE ITC (Section 17(5)): motor vehicles, food/beverages, life insurance, gym/health, civil construction, etc.
10. Hence option B is correct.
_Source: CS Executive Paper 4 Tax Laws (ICSI BoS) + Income Tax Act 1961 + CGST Act 2017 — CGST Act 2017, Section 16_
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