New restriction in claiming ITC by Budget 2022: ITC to be claimed only if not restricted in the details communicated under Sec 38

A new clause (ba) to sub-section (2) of section 16 of the CGST Act is proposed to be inserted to provide that input tax credit with respect to a supply can be availed only if such credit has not been restricted in the details communicated to the taxpayer under section 38.

Download Finance Bill, Budget Speech and Memorandum to Finance Bill 2022

The Amendment as per Finance Bill is as follows:

Amendment of section 16:

99. In the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the Central Goods and Services Tax Act), in section 16, ––

(a) in sub-section (2),––

(i) after clause (b), the following clause shall be inserted, namely:––

“(ba) the details of input tax credit in respect of the said supply communicated to such registered person under section 38 has not been restricted;”;