It is the challenge for the application of Section 16(4) which is proving to be a major burden for the business community at large. Many businessman owing to various reasons could not comply with the provision and hence are now facing huge demand notices.
As per section (4) A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the thirtieth day of November following the end of financial year to which such invoice or debit note pertains or furnishing of the relevant annual return, whichever is earlier
On a plain reading of the above provisions, it is apparent that taking of Input Tax Credit (ITC) is subject to various conditions enumerated from Sub-Sections (1) to (4). Section 16(4) imposes a condition upon the Registered Tax-Payer (RTP) wherein it is stated that ITC cannot be taken in respect of any invoice or debit note for supply of goods or services or both after the Thirtieth day of November (as amended) following the end of financial year to which such invoice or debit note pertains or furnishing of the relevant annual return, whichever is earlier. Thus, a limitation is sought to be imposed on the claiming of eligible ITC. However, there are certain grounds on which validity of Section 16(4) is required to be tested.
You first express your problems and issue a reply notice seeking exemption on humanitarian grounds, after that you can look for the possibiulities for a legal solution, if required
