Section 16(4) ITC Time Limit and the Section 16(5) Relief Explained

Input tax credit (ITC) under GST does not remain available forever. The Section 16(4) ITC time limit sets a cut-off by which credit relating to a financial year must be claimed. For invoices of FY 2025-26, that cut-off is 30 November 2026, which makes this the right time to check for missed credits.

Section 16(4) has also been the subject of significant litigation and a welcome retrospective relief. Section 16(5), inserted by the Finance (No. 2) Act, 2024, relaxed the time limit for the early years of GST, and section 16(6) protects businesses whose registration was cancelled and later restored. This article explains all three provisions in simple terms, with examples.

Key takeaways

• Under section 16(4), ITC on an invoice or debit note must be claimed by 30 November following the end of the financial year, or the date of filing the annual return, whichever is earlier.
• For FY 2025-26 invoices, ITC should be claimed in a GSTR-3B filed by 30 November 2026.
• Section 16(5) allows ITC for FY 2017-18 to 2020-21 claimed in any return filed up to 30 November 2021, with retrospective effect.
• Section 16(6) gives businesses whose registration was cancelled and later revoked additional time to claim ITC, subject to conditions.
• The special rectification window for old orders under section 16(5) and 16(6) has closed, and amounts already paid are not refundable under the relief.

What the Section 16(4) ITC time limit says

A registered person cannot take ITC on an invoice or debit note after:

• 30 November following the end of the financial year to which the invoice or debit note relates, or
• the date of furnishing the annual return for that year,

whichever is earlier.

In practice, most taxpayers file the annual return later than 30 November, so 30 November becomes the effective deadline. For debit notes, the relevant year is the year in which the debit note is issued, not the year of the original invoice.

Examples for FY 2025-26

Situation	Relevant financial year	Last date to claim ITC
Invoice dated 15 March 2026	2025-26	30 November 2026
Invoice dated 10 April 2025, missed in books	2025-26	30 November 2026
Debit note dated 5 May 2026 on a 2025-26 invoice	2026-27	30 November 2027
Annual return for 2025-26 filed on 20 October 2026	2025-26	20 October 2026 (earlier date)

For a monthly filer, the GSTR-3B for October 2026, due on 20 November 2026, is usually the last regular return in which FY 2025-26 credit can be claimed. If that return is filed after 30 November 2026, the credit claimed in it for the earlier year can be questioned.

Why the deadline matters

• Lost credit is a real cost. Unclaimed ITC is effectively additional tax.
• Late claims invite notices. Credit claimed after the cut-off is often identified during scrutiny or audit and demanded back with interest.
• The date of filing the return counts. ITC is claimed only when GSTR-3B is actually filed, so a late return can push credit beyond the time limit even if it is otherwise valid.

This is also why a monthly GSTR-2B vs GSTR-3B reconciliation is so useful: it catches missing credits long before the deadline.

Section 16(5): relief for FY 2017-18 to 2020-21

The early years of GST saw many businesses file returns late because of system issues, the pandemic and a steep learning curve. As a result, a large number of taxpayers received demands for ITC claimed after the section 16(4) time limit.

Section 16(5) now provides that for invoices or debit notes relating to FY 2017-18, 2018-19, 2019-20 and 2020-21, ITC may be taken in any return under section 39 filed up to 30 November 2021. The provision applies retrospectively from 1 July 2017.

In simple terms, if you claimed ITC for any of those four years in a GSTR-3B filed on or before 30 November 2021, that credit is no longer barred by section 16(4), provided the other conditions of ITC are met.

Section 16(6): relief after revocation of cancellation

Where a registration is cancelled and later revoked, the taxpayer often files pending returns only after revocation, by which time the normal deadline may have passed. Section 16(6) allows ITC on invoices relating to the period between cancellation and revocation, or before cancellation, to be claimed in a return filed up to 30 November following the financial year, or within 30 days of the revocation order, whichever is later, subject to conditions. The credit must not already have been time-barred on the date of the cancellation order.

How the relief was implemented

CBIC issued Circular No. 237/31/2024-GST dated 15 October 2024 explaining how the new provisions apply to different stages of proceedings:

1. Investigations and pending proceedings: officers were asked to take the new provisions into account.
2. Pending appeals: appellate authorities apply the amended law while deciding the appeal.
3. Orders already passed where no appeal was filed: a special rectification procedure was notified on 8 October 2024. Applications had to be filed within six months, so that window has now closed.

Importantly, section 16(5) and 16(6) do not allow a refund of tax or interest already paid, or credit already reversed, for such cases. If you are still facing an old proceeding, it is worth reviewing whether the relief applies before responding; our guide on replying to a GST show cause notice covers the broader process.

A practical checklist before 30 November 2026

1. Reconcile the full year of purchase records for FY 2025-26 with GSTR-2B.
2. List invoices not yet claimed, including those where the supplier filed late.
3. Follow up with suppliers who have not reported invoices, so they appear in GSTR-2B in time.
4. Review reversals under rule 37 that can be reclaimed after payment.
5. Check the annual return date: if you plan to file GSTR-9 early, remember that it can bring the deadline forward.
6. File the October 2026 GSTR-3B on time so that eligible credit is claimed within the limit.

Frequently asked questions

What is the last date to claim ITC for FY 2025-26?

30 November 2026, or the date you file the annual return for FY 2025-26, whichever is earlier.

Does the section 16(4) time limit apply to debit notes?

Yes, but the relevant year is the year in which the debit note is issued, not the year of the original invoice.

Can I still apply for rectification under section 16(5)?

The special rectification procedure required applications within six months from 8 October 2024, so the window has closed. Relief may still be considered in pending proceedings and appeals.

Will I get a refund of ITC reversed earlier because of section 16(4)?

No. The law specifically provides that amounts already paid or reversed in such cases are not refunded under the new provisions.

This article is general information based on the law as of September 2026, and is not legal or tax advice. Please check the facts of your own case with a professional before acting.