A registered person is not entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the due date of furnishing the return under section 39 for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier (Section 16(4) of CGST Act).
Return for the month of September is to be filed by 20th/22nd/24th October as the case may be and annual return of a financial year is to be filed by 31st December of the succeeding financial year.
This means if you go by the due dates, then input tax credit for a financial year must be availed on or before 20th/22nd/24th October of the following financial year. However if the annual return for the financial year has been filed before 20th/22nd/24th October, then the date of filing of annual return will be the date before which you should avail input tax credit.
Please note, time limit U/S 16(4) does not apply to claims for re-availing of credit that has been reversed earlier.
As per Section 18(2) of CGST Act, a taxable person is not entitled to take input tax credit in respect of any supply of goods and/or services to such person after the expiry of 1 year from the invoice date relating to such supply.
If GST is payable without consideration, the amount shall be deemed to have been paid.
Reversal of input tax credit if payment not made within time
As per the second proviso to section 16(2) of CGST Act, if a recipient fails to pay the amount towards the value of supply along with tax payable thereon within a period of 180 days from the date of invoice to the supplier of goods or services or both, an amount equal to the input tax credit availed by the recipient on such supply shall be added to his output tax liability, along with interest thereon in such manner as may be prescribed.
In case, the invoice is partly paid, then the input tax credit shall be added for the portion of the invoice which is not paid to the supplier. This means, if you have paid 80% of the invoice to the supplier, then ITC for 20% of the invoice shall be reversed.
After such reversal of ITC, if the recipient has paid to the supplier, then such recipient can take input tax credit. The restriction of time limit of 1 year is not applicable in this case.