Section 16(4): the GST credit deadline that does not forgive

Most compliance deadlines punish lateness with a fee. Section 16(4) of the CGST Act is different: miss it and the money is simply gone.

Input tax credit for a financial year cannot be taken after 30 November following that year, or the date on which the annual return for that year is filed — whichever comes earlier. That second limb catches people out. File your annual return early, in September say, and your credit window closed in September; it did not run to November.

The credit at stake is real cash. It is GST you already paid your suppliers and are entitled to set against GST you collect. An invoice that never made it into the books, a supplier who filed late so the credit only appeared in a later GSTR-2B, a purchase booked to the wrong period — each is an ordinary bookkeeping slip, and after the cut-off each becomes a permanent cost.

The work is a reconciliation, not a filing. Match GSTR-2B against your purchase register for the whole financial year, find eligible credit that was never claimed, and claim it in a GSTR-3B filed on or before the cut-off. Do it with time to spare, because the common discovery is a supplier who has not filed at all — and then you need to chase them, which takes weeks.

One caution: this section has been litigated and amended, and the treatment of specific years has moved with amnesty schemes and notifications. Check the current position for the year you are dealing with rather than assuming.