Amendment status not verified — confirm the current text below against the official source.
(1) Every registered person shall, subject to such conditions and restrictions as may be prescribed and in Eligibility and the manner specified in section 49, be entitled to take conditions for credit of input tax charged on any supply of goods or taking input tax credit. services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person. (2) Notwithstanding anything contained in this section, no registered person shall be entitled to the credit of any input tax in respect of any supplyof goods orservices or both to him unless,- (a) he is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying documents as may be prescribed; (b) he has received the goods or services or both. Explanation,- For the purposes of this clause, it shall be deemed that the registered person has received the goods where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise; (c) subject to the provisions of section 41, the tax charged in respect of such supply has been actually paid to the Government, either in cash or through utilisation of input tax credit admissible in respect of the said supply; and (d) he has furnished the return under section 39: 398 Provided that where the goods against an invoice are received in lots or instalments, the registered person shall be entitled to take credit upon receipt of the last lot or instalment: Provided further that where a recipient fails to pay to the supplier of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, the amount towards the value of supply along with tax payable thereon within a period of one hundred and eighty days from the date of issue of invoice by the supplier, an amount equal to the input tax credit availed by the recipient shall be added to his output tax liability, along with interest thereon, in such manner as maybe prescribed: Provided also t.. the recipient shall be entitled to avail of the credit of input tax on payment by him of the amount towards the value of supply of goods or services or both along with tax payable thereon. 43 of 1961. (3) Where the 2gistered person has claimed depreciation on the tax component of the cost of capital goods and plant and machinery under the provisions o the Income tax Act, 1961, the input tax credit on the said tax component shall not be allowed. (4) A registered person shall not be 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 of 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 17.(1) Where the goods or services or both are used by the registered person partly forthe purpose of any business and partly for other purposes, the amount of credit shall be restricted to so much of the input tax as is attributable to the purpose of his business. Apportionment of credit and blocked credits 399 (2) Where the goods or services or both are used by the registered person partly for effecting taxable supplies including zero- rated supplies under this Act or under the Integrated Goods and Services Tax Act and partly for effecting exempt supplies under the said Acts, the amount of credit shall be registered to so much of the input tax as is attributable to the said taxable supplies including zero-rated supplies. (3) The value of exempt supply under sub-section (2) shall be such as may be prescribed, and shall include supplies on which the recipient is liable to pay tax on reverse charge basis. transactions in securities, sale of land and, subject to clause (b) of paragraph 5 of Schedule Il, sale of building. (4) A banking company or a financial institution including a non-banking financial company, engaged in supplying services by way of accepting deposits, extending loans or advances shall have the option to either comply with the provisions of sub- section (2), or avail of, every month, an amount equal to fifty per cent. of the eligible input tax credit on inputs, capital goods and input services in that month and the rest shall lapse; Provided that the option once exercised shall not be withdrawn during the remaining part of thefinancial year; Provided further that the restriction of fifty per cent, shall not apply to the tax paid on supplies made by one registered person to another registered person having the same Permanent Account Number. (5) Notwithstanding anything contained in sub-section (1) of section 16 and sub-section (1) of section 18 input tax credit shall not be available in respect of the following, namely:- (a) motorvehicles and other conveyances exrpt when they are used- (i) for making the following taxable supplies, namely:- (a) further supply of such vehicles or conveyance; or (b) transportation of passengers; or (c) imparting training on driving, flying, navigating such vehicles or conveyances: 400 (ii) for transportation of goods; (b) the following supply of goods or services or both:- (i) food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery except where an inward supply of goods or services or both of a particular category is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply; (ii) membership of a club, health and fitness centre; (iii) rent-a-cab, life insurance and health insurance except Where- (a) the Government notifies the services which are obligatory for an employer to provide to its employees under any law for the time being in force; or (b) such inward supply of goods or services or both of a particular category is used by a registered person for making an outward taxable supply of the same categor' of goods or services or both or as part of a taxable composite or mixed supply; and (iv) travel benefits extended to employees on vacation such as leave or home travel concession. (c) works contract services when supplied for construction of an immovable property (other than plants and machinery) except where it is an input service for further supply of works contract service; (d) goods or services or both received by a taxable person for contraction of an immovable property (other than plants or machinery) on his own account including when such goods or services or both are used in the course orfurtherance of business. Explanation,- For the purposes of clauses (c) and (d), the expression "construction" includes re-construction, renovation, additions or alterations or repairs, to the extent of capitalisation, to the said immovable property; 401 (e) goods or services or both on which tax has been paid under section 10 (f) goods or services or both received by a non-resident taxable person except on goods imported by him; (g) goods or services or both used for personal consumption; (h) goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples; and (i) any tax paid in accordance with the provisions of section 74, 129 and