A registered business receives machinery for taxable use in July 2025 and the supplier's valid tax invoice in September 2025. It first operates the machinery in October 2025. The invoice is…
Question and options
A registered business receives machinery for taxable use in July 2025 and the supplier's valid tax invoice in September 2025. It first operates the machinery in October 2025. The invoice is communicated in September, the supplier has paid the tax, all other section 16 conditions are met, and no depreciation is claimed on the tax. In which month can it first take the input tax credit?
September 2025
In equal parts over 60 months from October 2025
July 2025
October 2025
Answer and explanation
Section 16(2) of the CGST Act allows credit only when the recipient holds the tax invoice and has received the goods, among other conditions; here both are met in September 2025. Credit does not wait for the machinery to be put to use, since use in the course of business is intended from receipt, and the 60-month spread belongs to rule 43 on capital goods used for both taxable and exempt supplies, not to the time of taking credit.
Practice for these exams
-
All India Bar Examination (AIBE)
Subject revision
See pack details on LawMint.net -
IIT Kharagpur LL.M. Entrance
Subject revision
See pack details on LawMint.net -
CLAT PG
Subject revision for a passage-based exam
-
AILET PG
Subject revision
Related exam syllabi
More solved explanations in GST - levy, supply, input tax credit, registration & returns
- Under Section 69(2) of the CGST Act, what is the period for producing a person before a magistrate after an arrest for a Section 132(5) offence?
- Under section 8(b) of the Central Goods and Services Tax Act, 2017, how is a mixed supply taxed?
- A registered business supplies used machinery on which it took input tax credit. The credit after applying the prescribed reduction is ₹1,26,000, and GST on the…
- What is the minimum rank of the proper officer authorised to exercise the relevant inspection or search authorisation power under Section 67 of the CGST Act?
- What does section 171(1) of the CGST Act, 2017 require of a supplier?