Availment of input tax credit
Section 41, CGST Act
Straight from CBIC
Official source, not a summary of a summary
Full text included
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Amendment history
See what changed, and when
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In one line
You take input tax credit on a self-assessed basis in your return, and it goes to your electronic credit ledger. But if your supplier has not paid the tax on that supply, you must reverse that credit with interest – and you can take it back once the supplier pays. The old ‘provisional credit’ concept is gone.
What this means in practice
The parts that actually decide cases — the things a practitioner checks first.
Section 41 as recast from 01-10-2022 makes the credit self-assessed but conditional: if the supplier does not pay the tax, the recipient reverses with interest and re-avails when the supplier pays.
The operative mechanism is Rule 37A – reverse by 30 November following the year if the supplier has not paid by 30 September – which is where the compliance actually bites.
Questions people actually ask
Real questions we get on this provision, answered straight.
How do I know my supplier has not paid, so that Rule 37A applies?+
The portal flags the position through GSTR-2B and the section 38 restricted-credit categories. Practically, run a 37A check each October on invoices for the previous financial year and reverse by 30 November where the supplier’s GSTR-3B for that period is unfiled.
How this provision is built
The skeleton, clause by clause — useful when a notice cites a specific sub-clause.
The exact words of the law
653 characters, uneditedReproduced from the CBIC text. We explain it above — but you should always be able to read it yourself.
Read the full provision+
(1) Every registered person shall, subject to such conditions and restrictions as may be prescribed, be entitled to avail the credit of eligible input tax, as self-assessed, in his return, and such amount shall be credited to his electronic credit ledger.
(2) The credit of input tax availed under
(1) in respect of supplies the tax on which has not been paid by the supplier shall be reversed along with applicable interest by the said person in such manner as may be prescribed: Provided that where the supplier makes payment of the tax, the said registered person may re-avail the amount of credit reversed by him in such manner as may be prescribed.
What changed, and when
The amendment trail, newest first — because the version that applies to your case depends on the period.
2022-10-01 · Fully substituted
Recast to self-assessed availment + supplier-non-payment reversal with re-availment on payment; removed provisional-credit concept.
2017-07-01 · Commenced (as ‘Claim of ITC and provisional acceptance thereof’)
Original provisional-credit provision.
Where this comes from
Text reproduced from the Central Board of Indirect Taxes and Customs, as available on 2026-09-05. The explanation and practice notes above are GSTZone’s own, written for this hub. If you spot anything out of date, tell us and we’ll fix it — this hub is checked daily against CBIC.
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