Central Goods and Services Tax Act, 2017 | Chapter IX - Returns | Updated: 15 September 2026

Section 41 of CGST Act - Availment of Input Tax Credit

Section 41 of the Central Goods and Services Tax Act, 2017 now governs the availment of eligible input tax credit (ITC), and the reversal and later re-availment of credit where the supplier has not paid the tax relating to the supply.

Important amendment: The earlier Section 41 titled "Claim of input tax credit and provisional acceptance thereof" was substituted by section 106 of the Finance Act, 2022. The substituted provision came into force on 1 October 2022. The present title is "Availment of input tax credit."

Current Section 41 - Availment of input tax credit

(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 by a registered person under sub-section (1) in respect of such supplies of goods or services or both, the tax payable whereon 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 said supplier makes payment of the tax payable in respect of the aforesaid supplies, the said registered person may re-avail the amount of credit reversed by him in such manner as may be prescribed.

Meaning and effect of Section 41

Section 41 permits a registered person to avail eligible ITC on a self-assessment basis in the return, subject to the conditions and restrictions prescribed under the CGST Act and Rules. The credit is reflected in the electronic credit ledger.

Sub-section (2) addresses a supplier-default situation. If tax relating to a supply has not been paid by the supplier, the recipient is required to reverse the ITC, together with applicable interest, in the prescribed manner. If the supplier subsequently pays the tax, the recipient may re-avail the credit that had been reversed.

Section 41 must be read with the general ITC conditions

Section 41 does not create an unrestricted right to credit. Eligibility continues to depend principally on Section 16 of the CGST Act and the applicable CGST Rules. In practical terms, the taxpayer should verify the prescribed tax document, receipt of goods or services, communication of invoice or debit-note details in the prescribed statement, payment of tax to the Government as required by law, and filing of the return under Section 39.

Provision	Relevance to ITC
Section 16	Eligibility and statutory conditions for taking input tax credit.
Rule 36	Prescribes documentary requirements and conditions for claiming ITC, including invoice/debit-note reporting requirements.
Rule 37	Deals with reversal where consideration and tax are not paid to the supplier within the period specified under Section 16.
Rule 37A	Provides the mechanism for reversal and re-availment where the supplier has furnished invoice details but has not furnished the corresponding return in FORM GSTR-3B within the prescribed time.

Rule 37A - Reversal and re-availment where supplier has not filed the corresponding GSTR-3B

Rule 37A operationalises Section 41(2) for specified supplier-default cases. Broadly, where the recipient has availed ITC in FORM GSTR-3B on an invoice or debit note reported by the supplier in the statement of outward supplies or through the Invoice Furnishing Facility, but the supplier does not furnish the corresponding FORM GSTR-3B by 30 September following the end of the relevant financial year, the recipient must reverse the specified credit in FORM GSTR-3B on or before 30 November following the end of that financial year. If the supplier later furnishes the corresponding return, the recipient may re-avail the credit in a subsequent FORM GSTR-3B, subject to the law.

Practical point: Availability of an invoice in the recipient's records or in the auto-generated statement should not be treated as the only ITC test. Section 16, Section 41, Rule 36, Rule 37A and other applicable restrictions should be checked together.

Old Section 41 versus current Section 41

The original provision used the concept of "claim of input tax credit and provisional acceptance thereof" and stated that self-assessed eligible credit would be credited on a provisional basis. That text is no longer the current Section 41. With effect from 1 October 2022, Section 41 was substituted and the statutory focus changed to availment of eligible ITC, reversal where supplier tax has not been paid, and re-availment after the supplier pays the tax.

Accordingly, the former page heading and the old two-sub-section text have been replaced in this article so that the page reflects the presently operative provision.

Official legal references

CBIC - GST Acts
CBIC - Central Tax Notifications
Notification No. 18/2022-Central Tax dated 28 September 2022 - brought the relevant Finance Act, 2022 amendments into force from 1 October 2022.

This article is intended as a statutory reference and general information. For a transaction-specific ITC position, the facts, tax period, applicable notifications, rules and return data should be examined.