Section 41 of CGST Act, 2017 : Section 41: Availment Of Input Tax Credit

Explanation using Example

Example of Section 41 of The Central Goods and Services Tax Act, 2017

Imagine a business, ABC Pvt Ltd, which is registered under GST. In the month of March, ABC Pvt Ltd purchases office supplies worth INR 1,00,000 on which GST @ 18% is charged, amounting to INR 18,000. As per Section 41, ABC Pvt Ltd can claim this INR 18,000 as input tax credit (ITC) in its GST return, subject to meeting the prescribed conditions.

However, if the supplier of the office supplies does not pay the GST to the government, ABC Pvt Ltd will have to reverse this ITC of INR 18,000 along with the applicable interest. If later the supplier pays the GST, ABC Pvt Ltd can then re-avail the reversed ITC amount.