Section 16 - Eligibility and conditions for taking input tax credit

Finin2min Summary

In practical work, use this provision by first fixing the taxable event or procedural step, then connecting the facts to Chapter V and the linked Rules, forms, notifications, circulars and State/UT GST law.

Bare Act / Law / Rules / Notifications

Section 16. Eligibility and conditions for taking input tax credit.- (1) Every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49 , be entitled to take credit of input tax charged on any supply of goods or 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 supply of goods or services 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 ; 1 [(aa) the details of the invoice or debit note referred to in clause (a) has been furnished by the supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note in the manner specified under section 37 ;] (b) he has received the goods or services or both. 2 [ Explanation .- For the purposes of this clause, it shall be deemed that the registered person has received the goods or, as the case may be, services- (i) 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; (ii) where the services are provided by the supplier to any person on the direction of and on account of such registered person;] 3 [(ba) the details of input tax credit in respect of the said supply communicated to such registered person ...

Workflow / Flow Chart

1. Read the official statutory text of Section 16 with Chapter V and note every proviso or explanation.

Q&A

What does Section 16 cover?

Section 16 covers eligibility and conditions for taking input tax credit within Chapter V of the CGST Act.

Can this page replace the official Act?

No. Use this page as a practical guide, then verify Section 16 in India Code, CBIC and any applicable Gazette notification.

What should be retained for Section 16?

Keep the official source, fact matrix, invoices or returns, portal acknowledgements, calculations, correspondence, notices/orders and reviewer conclusion.

Primary Official Sources

• India Code consolidated CGST Act PDFofficial consolidated Act PDF used for statutory cross-check
• CBIC Tax Information Act explorerofficial CBIC section explorer route
• GST Council Central GST resourcesofficial GST Council route for central GST law resources
• CBIC official section content payloadofficial CBIC section HTML payload used for the statutory extract

Related Inter / Intra Links

Section 16 should be read inside the wider GST law hub with CGST Rules, GST forms, circulars, notifications, case-law and practical workflow pages.

Disclaimer

Finin2min provides this Section 16 page for education and professional research. Official India Code, CBIC, Gazette and court sources control the legal position for Eligibility and conditions for taking input tax credit.