GST Returns Filed Before Section 16(5) Cut-Off Date Entitled for ITC: Kerala High Court 

The Kerala High Court allows the petitioner company to avail Input Tax Credit (ITC) under Section 16(5) of the CGST/KSGST Act, holding that once returns are filed on or before the cut-off date prescribed under the said section, the time limit under Section 16(4) loses its significance.

The present writ petition was filed by WE MATCH (petitioner) before the Kerala High Court, challenging an ex parte order passed under Section 73(9) of the CGST Act. The said order had denied the Input Tax Credit (ITC) claimed by the petitioner for the Assessment Year 2018-19, for non-filing of monthly returns within the statutory time limit prescribed under Section 16(4) of the CGST/KSGST Act, for the period between April 2018 and March 2019.

The petitioner relied on the provisions of Section 16(5) of the Act, which says that in case a taxpayer furnishes his/her income tax return (ITR) on or before November 30, 2021 (cut-off date), he/she becomes entitled to ITC (Input Tax Credit).

It was further highlighted that it has been clearly shown in the show cause notice (SCN) that the petitioner had furnished its returns for the months of April 2018-March 2019 on November 27, 2019, and November 28, 2019. It explicitly means the petitioner had successfully filed its returns before the cut-off date prescribed under Section 16(5) of the Act. As per the law, if a taxpayer furnishes its return within the cut-off date under Section 16(5), the time limit under Section 16(4) loses its significance. Consequently, the petitioner is rightly eligible for the ITC in question.

Considering the aforementioned facts of the case, the high court set aside the impugned ex parte order denying the petitioner’s ITC claim.