Availment of input tax credit

Section 41(1)

Every registered person shall, subject to such conditions and restrictions as may be prescribed, be entitled to avail the credit of eligible input tax, as self-assessed, in his return and such amount shall be credited to his electronic credit ledger.

AI Explanation

Every person who is registered for taxation must follow certain conditions and restrictions to claim the credit of eligible input tax. This credit, which is self-assessed, is claimed in the person's return and is then added to their electronic credit ledger.

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Section 41(2)

The credit of input tax availed by a registered person under sub-section (1) in respect of such supplies of goods or services or both, the tax payable whereon has not been paid by the supplier, shall be reversed along with applicable interest, by the said person in such manner as may be prescribed:

Provided that where the said supplier makes payment of the tax payable in respect of the aforesaid supplies, the said registered person may re-avail the amount of credit reversed by him in such manner as may be prescribed.

AI Explanation

When a registered person claims input tax credit for supplies of goods or services where the supplier has not paid the required tax, the registered person must reverse this credit along with applicable interest. The process for reversal is determined by the prescribed guidelines.

• Exception: If the supplier later pays the tax for the mentioned supplies, the registered person can re-avail the reversed credit, following the prescribed procedure.