When does GST Input Tax Credit lapse under Section 16 4)? ITC on any invoice or debit note for a financial year lapses after the earlier of November 30 following that financial year or the date of filing the annual return (GSTR Nine) for that year, whichever comes first. For example, ITC on FY 2025-26 invoices must be claimed in GSTR ThreeB filed on or before November 30, 2026, unless you file GSTR Nine earlier. Once lapsed, the credit cannot be recovered. (Section 16 4), CGST Act 2017, as amended by Finance Act, 2022)
What Section 16 4) Says
Section 16 4) of the Central Goods and Services Tax (CGST) Act, 2017 sets the hard deadline for claiming ITC. The provision states:
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.
Two deadlines run in parallel:
The earlier of the two applies. Since GSTR Nine is due on December 31 of the following year and most businesses file it in November or December, November 30 is usually the effective deadline.
This is separate from the four eligibility conditions under Section 16 2). Section 16 2) defines what ITC you are eligible to claim (valid invoice, receipt of goods or services, tax reflected in GSTR TwoB, and payment to supplier within 180 days). Section 16 4) defines when you must claim it by. Both must be satisfied.
How the Deadline Changed Over Time
Section 16 4) has been amended three times since GST launched in 2017.
Original provision (July 1, 2017): ITC had to be claimed by the due date of filing GSTR ThreeB for September of the following year. For monthly filers, this meant October 20.
Finance Act 2020 (effective January 1, 2021): Changed how debit notes are treated. Before this, the time limit for a debit note was linked to the financial year of the original invoice. After the amendment, the time limit is based on the date of the debit note itself. A debit note issued in April 2026 relating to an original invoice from March 2025 now falls under FY 2026-27 for Section 16 4) purposes, not FY 2024-25.
Finance Act 2022 (effective October 1, 2022): Extended the deadline from "due date of furnishing of return under Section 39 for September" to "thirtieth day of November" (Section 100(b), Finance Act 2022). This gave businesses about 41 extra days. The GSTR ThreeB for October (due November 20) became the last practical monthly return for claiming prior-year ITC.
Deadline Calculation: Practical Examples
FY 2025-26 Invoices
You receive invoices throughout FY 2025-26 (April 2025 to March 2026). Here is when ITC on those invoices lapses:
The last GSTR ThreeB where you can claim FY 2025-26 ITC is the one you file on or before your deadline. For monthly filers who have not yet filed GSTR Nine, GSTR ThreeB for October 2026 (due November 20) is the last convenient opportunity. For quarterly filers (QRMP scheme), GSTR ThreeB for July to September 2026 (due October 22) is the last filing before the November 30 cut-off.
The Early GSTR Nine Trap
If you file GSTR Nine early, say in September, your ITC deadline for the previous year becomes September. Any unclaimed ITC for that year is permanently lost. Businesses that rush to file GSTR Nine sometimes overlook pending supplier invoices. Check all ITC claims before filing GSTR Nine.
Section 16 5) and 16 6): Retrospective Relief
The Finance (No. 2) Act, 2024 (Section 118, effective November 1, 2024) inserted two new sub-sections with retrospective effect from July 1, 2017:
Section 16 5) provides relief for FY 2017-18 to 2020-21. Taxpayers who claimed ITC in any GSTR ThreeB filed on or before November 30, 2021 are deemed to have claimed it within the time limit, even if the original Section 16 4) deadline had passed. If a demand order was raised denying ITC on time-limit grounds for these years, the taxpayer can apply for rectification. The Madras High Court confirmed in January 2026 that Section 16 5) has overriding retrospective effect over Section 16 4) for these financial years.
Section 16 6) provides relief for registration cancellation and revocation cases. If your GST registration was cancelled under Section 29 and later revoked under Section 30, you can claim ITC on invoices for the cancellation period by the later of November 30 following the relevant financial year or 30 days from the date of the revocation order. This ensures that businesses whose registrations were temporarily cancelled do not permanently lose ITC for the gap period.
Both provisions apply only where ITC was denied on Section 16 4) time-limit grounds. If the ITC itself was ineligible (for example, blocked under Section 17 5)), these sub-sections do not help.
Common Mistakes That Cause ITC Lapse
Step 1: Not reconciling GSTR TwoB monthly.** ITC is available only when your supplier files GSTR One and the invoice appears in your GSTR TwoB (Section 16 2)(aa)). If a supplier files GSTR One late and the invoice shows up in your GSTR TwoB only in November, you have very little time left.
Step 2: Not following up with suppliers.** If a supplier has not reported your invoice in their GSTR One, your ITC will not appear in GSTR TwoB and you cannot legally claim it. By the time you discover this in October or November, the supplier may not have time to file amendments.
Step 3: Filing GSTR Nine before verifying all ITC.** As explained above, filing GSTR Nine triggers the earlier of the two Section 16 4) deadlines. Confirm that every eligible credit from the previous year has been claimed in GSTR ThreeB before filing GSTR Nine.
Step 4: Ignoring debit notes.** A debit note issued in April of the next financial year starts a new 16 4) clock based on the debit note date, not the original invoice date. Businesses sometimes miss this and assume the credit window has closed.
Monthly Action Checklist to Protect Your ITC
- Download GSTR TwoB on the 1Floor 4 of every month (after it is generated on the 13th).
- Reconcile your purchase register with GSTR TwoB. Identify invoices missing from GSTR TwoB.
- Contact suppliers for any mismatches. Request them to file or amend their GSTR One by the next filing date.
- Claim all eligible ITC in your GSTR ThreeB for the current period. Do not defer claiming to later months.
- Review prior-year invoices in September and October. Any FY 2025-26 invoices not yet claimed must be included in GSTR ThreeB by November 30, 2026.
- Do not file GSTR Nine until you have confirmed that all ITC from the previous financial year has been claimed in GSTR ThreeB.
How Tax Garden Helps
Tax Garden's GST compliance service includes monthly GSTR TwoB reconciliation, supplier mismatch follow-up, and ITC tracking against Section 16 4) deadlines. If you are a business owner who files GST returns but does not reconcile GSTR TwoB every month, unclaimed credits are likely slipping through. Visit Tax Garden's pricing page to see how the compliance plans work.
