Chapter V INPUT TAX CREDIT

16. Eligibility and conditions for taking input tax credit. - (1) Every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person. (2) Notwithstanding anything contained in this section, no regi stered person shall be entitled to the credit of any input tax in respect of any supply of goods or services or both to him unless, –– (a) he is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax payin g documents as may be prescribed; 5[(aa) the details of the invoice or debit note referred to in clause (a) has been furnished by the supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note in the manner specified under section37;]5 (b) he has received the goods or services or both. 6[(ba) the details of input tax credit in respect of the said supply communicated to such registered person under section 38 has not been restricted;]6 2[Explanation. — For the purposes of this clause, it shall be deemed that theregisteredpersonhasreceivedthegoodsor,asthecasemaybe,services, - (i) where the goods are delivered by the supplier to a recipientor any other person on the direction of such registered p erson, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise; (ii) where the services are provided by the supplier to any person on the direction of and on account of such registered person.‖]2 (c) subject to the provisions of 3[section 41 7[XXX]7]3, the tax charged in respect of such supply has been actually paid to the Government, either in cash or through utilisation of input tax credit admissible in respect of the said supply; and (d) he has furnished the return under section 39: Provided that where the goods against an invoice are received in lots or instalments, the registered person shall be entitled to take credit upon receipt of the last lot or instalment: Provided further that where a recipient fails to pay to the supplier of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, the amount towards the value of supply along with tax payable thereon within a perio d of one hundred and eighty days from the date of issue of invoice by the supplier, an amount equal to the input tax credit availed by the recipient shall be 9[paid by him along with interest payable under section 50]9, in such manner as may be prescribed: Provided also that the recipient shall be entitled to avail of the credit of input tax on payment made by him 10[to the supplier]10 of the amount towards the value of supply of goods or services or both along with tax payable thereon. (3) Where the registered person has claimed depreciation on the tax component of the cost of capital goods and plant and machinery under the provisions of the Income -tax 46 Act, 1961 (Central Act 43 of 1961), the input tax credit on the said tax component shall not be allowed. (4) 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 8[thirtieth day of November]8 for the month of September following the end of financial year t o which such invoice or 4[XXX]4 debit note pertains or furnishing of the relevant annual return, whichever is earlier. 11[(5) Notwithstanding anything contained in sub -section (4), in respect of an invoice or debit note for supply of goods or services or b oth pertaining to the Financial Years 2017 - 18, 2018 -19, 2019 -20 and 2020 -21, the registered person shall be entitled to take input tax credit in any return under section 39 which is filed upto the thirtieth day of November, 2021. (6) Where registration o f a registered person is cancelled under section 29 and subsequently the cancellation of registration is revoked by any order, either under section 30 or pursuant to any order made by the Appellate Authority or the Appellate Tribunal or court and where ava ilment of input tax credit in respect of an invoice or debit note was not restricted under sub -section (4), on the date of order of cancellation of registration, the said person shall be entitled to take the input tax credit in respect of such invoice or d ebit note for supply of goods or services or both, in a return under section 39, - (i) filed upto thirtieth day of November following the financial year to which such invoice or debit note pertains or furnishing of the relevant annual return, whichever is earlier; or (ii) for the period from the date of cancellation of registration or the effective date of cancellation of registration, as the case may be, till the date of order of revocation of cancellation of registration, where such return is filed withi n thirty days from the date of order of revocation of cancellation of registration, whichever is later.]11 1[Provided that the registered person shall be entitled to take input tax credit after the due date of furnishing of the return under section 39 for the month of September, 2018 till the due date of furnishing of the return under the said section for the month of March, 2019 in respect of any invoice or invoice relating to such debit note for supply of goods or services or both made during the financi al year 2017 -18, the details of which have been uploaded by the supplier under sub-section for (1) of section 37 till the due date for furnishing the details under sub -section (1) of said section for the month of March. 2019.]1 issued vide order no. 02/2018 No.FD 47 CSL 2017, Bengaluru, dated 31.12.2018

17. Apportionment of credit and blocked credits. - (1) Where the goods or services or both are used by the registered person partly for the purpose of any business and partly for other purposes, the amount of credit shall be restricted to so much of the input tax as is attributable to the purposes of his business. (2) Where the goods or service s or both are used by the registered person partly for effecting taxable supplies including zero-rated supplies under this Act or under the Integrated Goods and Services Tax Act and partly for effecting exempt supplies under the said Acts, the amount of credit shall be restricted to so much of the input tax as is 47 attributable to the said taxable supplies including zero-rated supplies. (3) The value of exempt supply under sub -section (2) shall be such as may be prescribed, and shall include supplies on which the recipient is liable to pay tax on reverse charge basis, transactions in securities, sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building. 1[Explanation.- For the purposes of this sub-section, the expression ‗value of exempt supply‗‗ shall not include the value of activities or transactions specified in Schedule III, 3[except, — (i) the value of activities or transactions specified in paragraph 5 of the said Schedule; and (ii) the value of such activities or transactions as may be prescribed in respect of clause (a) of paragraph 8 of the said Schedule.]3]1 (4) A banking company or a financial institution including a non -banking financial company, engaged in supplying services by way of accepting deposits, extendin g loans or advances shall have the option to either comply with the provisions of sub-section (2), or avail of, every month, an amount equal to fifty per cent. of the eligible input tax credit on inputs, capital goods and input services in that month and the rest shall lapse: Provided that the option once exercised shall not be withdrawn during the remaining part of the financial year: Provided further that the restriction of fifty per cent. shall not apply to the tax paid on supplies made by one registered person to another registered person having the same Permanent Account Number. (5) Notwithstanding anything contained in sub -section (1) of section 16 and sub - section (1) of section 18, input tax credit shall not be available in respect of the following, name ly:- 2[(a) motor vehicles for transportation of persons having approved seating capacity of not more than thirteen persons (including the driver), except when they are used for making the following taxable supplies, namely: - (A) further supply of such motor vehicles; or (B) transportation of passengers; or (C) imparting training on driving such motor vehicles; (aa) vessels and aircraft except when they are used, - (i) for making the following tax able supplies, namely: - (A) further supply of such vessels or aircraft; or (B) transportation of passengers; or (C) imparting training on navigating such vessels; or (D) imparting training on flying such aircraft; (ii) for transportation of goods; (ab)services of general insurance, servicing, repair and maintenanc e in so far as they relate to motor vehicles, vessels or aircraft refer red to in cla use(a)or clause (aa): Provided that, the input tax credit in respect of such services shall be available, - (i) where the motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa) are used for the purposes specified therein; (ii) where received by a taxable person engaged, - (I) in the manufacture of such motor vehicles, 48 vessels or aircraft; or (I) in the supply of general insurance services in respect of such motor vehicles, vessels or aircraft insured by him; (b) the following supply of goods or services or both, - (i) food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, leasing, renting or hiring of motor vehicles, vessels or air craft referred to in clause (a) or clause (aa) except when used for the purposes specified therein, life insurance and health insurance: Provided that, the input tax credit in respect of such goods or services or both shall be available where an inward supply of such goods or services or both is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as an element of a tax able composite or mixed supply; (ii) membership of a club, health and fitness centre; and (iii) travel benefits extended to employees on vacation such as leave or home travel concession: Provided that, the input tax creditin respect of such goods or services or both shall be available, where it is obligatory for an employer to provide to its employees under any law for the time being inforce.]1. (c) works contract services when supplied for construction of an immovable property (other than plant and machinery) except where it is an input service for further supply of works contract service; (d) goods or services or both received by a taxable person for construction of an immovable property (other than 6[plant and machinery ]6) on his own account including when such goods or services or both are used in the course or furtherance of business. Explanation .––For the purposes of clauses (c) and (d), the expression ―construction‖ includes re-construction, renovation, additions or alterations or repairs, to the extent of capitalisation, to the said immovable property; (e) goods or services or both on which tax has been paid under section 10; (f) goods or services or both received by a non -resident taxable person except on goods imported by him; 4[(fa) goods or services or both received by a taxable person, which are used or intended to be used for activities relating to his obligations under corporate social responsibility referred to in section 135 of the Companies Act, 2013 (Central Act 18 of 2013);]4 (g) goods or services or both used for personal consumption; (h) goods lost, stolen, destroyed, written off or dispo sed of by way of gift or free samples; and (i) any tax paid in accordance with the provisions of 5[section 74 in respect of any period upto Financial Year 2023 -24.]5 (6) The Government may prescribe the manner in which the credit referred to in sub - sections (1) and (2) may be attributed. 8[Explanation 1]8.–– For the purposes of this Chapter and Chapter VI, the expression ―plant and machinery‖ means apparatus, equipment, and machinery fixed to earth by foundation or structural support that are used for making outward supply of goods or services or both and includes such foundation and structural supports but excludes - (i) land, building or any other civil structures; (ii) telecommunication towers; and (iii) pipelines laid outside the factory premises. 7[Explanation -2.- For the purposes of clause (d), it is hereby clarified that notwithstanding anything to the contrary contained in any judgment, decree or order of any court, tribunal, or other authority, any reference to "plant or machinery" shall be construed 49 and shal l always be deemed to have been construed as a reference to "plant and machinery.]7 5. Substitiuted by Act 02 of 2025 w.e.f ……………………………... 8. Renumbererd by Act 43 of 2025 w.e.f. ……………………

18. Availability of credit in special circumstances. - (1) Subject to such conditions and restrictions as may be prescribed – (a) a person who has applied for registration under this Act within thirty days from the date on which he becomes liable to registration and has been granted such registration shall be entitle d to take credit of input tax in respect of inputs held in stock and inputs contained in semi -finished or finished goods held in stock on the day immediately preceding the date from which he becomes liable to pay tax under the provisions of this Act; (b) a person who takes registration under sub -section (3) of section 25 shall be entitled to take credit of input tax in respect of inputs held in stock and inputs contained in semi -finished or finished goods held in stock on the day immediately preceding the date of grant of registration; (c) where any registered person ceases to pay tax under section 10, he shall be entitled to take credit of input tax in respect of inputs held in stock, inputs contained in semi -finished or finished goods held in stock and on capit al goods on the day immediately preceding the date from which he becomes liable to pay tax under section 9: Provided that the credit on capital goods shall be reduced by such percentage points as may be prescribed; (d) where an exempt supply of goods or services or both by a registered person becomes a taxable supply, such person shall be entitled to take credit of input tax in respect of inputs held in stock and inputs contained in semi -finished or finished goods held in stock relatable to such exempt su pply and on capital goods exclusively used for such exempt supply on the day immediately preceding the date from which such supply becomes taxable: Provided that the credit on capital goods shall be reduced by such percentage points as may be prescribed. (2) A registered person shall not be entitled to take input tax credit under sub-section (1) in respect of any supply of goods or services or both to him after the expiry of one year from the date of issue of tax invoice relating to such supply. (3) Where there is a change in the constitution of a registered person on account of sale, merger, demerger, amalgamation, lease or transfer of the business with the specific provisions for transfer of liabilities, the said registered person shall be allowed to transfer the input tax credit which remains unutilised in his electronic credit ledger to such sold, merged, demerged, amalgamated, leased or transferred business in such manner as may be prescribed. (4) Where any registered person who has availed of input tax credit opts to pay tax under section 10 or, where the goods or services or both supplied by him become wholly exempt, he shall pay an amount, by way of debit in the electronic credit ledger or electronic cash ledger, equivalent to the credit of input tax in respect o f inputs held in stock and inputs 50 contained in semi -finished or finished goods held in stock and on capital goods, reduced by such percentage points as may be prescribed, on the day immediately preceding the date of exercising of such option or, as the case may be, the date of such exemption: Provided that after payment of such amount, the balance of input tax credit, if any, lying in his electronic credit ledger shall lapse. (5) The amount of credit under sub -section (1) and the amount payable under sub - section (4) shall be calculated in such manner as may be prescribed. (6) In case of supply of capital goods or plant and machinery, on which input tax credit has been taken, the registered person shall pay an amount equal to the input tax credit taken on the said capital goods or plant and machinery reduced by such percentage points as may be prescribed or the tax on the transaction value of such capital goods or plant and machinery determined under section15, whichever is higher: Provided that where refractory bricks, moulds and dies, jigs and fixtures are supplied as scrap, the taxable person may pay tax on the transaction value of such goods determined under section 15.

19. Taking input tax credit in respect of inputs and capital goods sent for job work.- (1) The principal shall, subject to such conditions and restrictions as may be prescribed, be allowed input tax credit on inputs sent to a job worker for job work. (2) Notwithstanding anything contained in clause (b) of sub -section (2) of section 16, the principal shall be entitled to take credit of input tax on inputs even if the inputs are directly sent to a job worker for job work without being first brought to his place of business. (3) Where the inputs sent for job work are not received back by the principal after completion of job work or otherwise or are not supplied from the place of business of the job worker in accordance with clause (a) or clause (b) of sub -section (1) of section 143 within one year of being sent out, it shall be deemed that su ch inputs had been supplied by the principal to the job worker on the day when the said inputs were sent out: Provided that where the inputs are sent directly to a job worker, the period of one year shall be counted from the date of receipt of inputs by the job worker. (4) The principal shall, subject to such conditions and restrictions as may be prescribed, be allowed input tax credit on capital goods sent to a job worker for job work. (5) Notwithstanding anything contained in clause (b) of sub -section (2) of section 16, the principal shall be entitled to take credit of input tax on capital goods even if the capital goods are directly sent to a job worker for job work without being first brought to his place of business. (6) Where the capital goods sent for job work are not received back by the principal within a period of three years of being sent out, it shall be deemed that such capital goods had been supplied by the principal to the job worker on the day when the said capital goods were sent out: Provided that where the capital goods are sent directly to a job worker, the period of three years shall be counted from the date of receipt of capital goods by the job worker. (7) Nothing contained in sub -section (3) or sub -section (6) shall apply to moulds and dies, jigs and fixtures, or tools sent out to a job worker for job work. Explanation.- For the purpose of this section, ―principal‖ means the person referred to in section 143.

2[20. Manner of distribution of credit by Input Service Distributor. - (1) Any office of the supplier of goods or services or both which receives tax invoices towards the receipt of input services, including invoices in respect of services liable to tax under sub -section (3) or sub -section (4) of section 9, 3[of this Act or under su b-section (3) or sub -section (4) of section 5 of the Integrated Goods and Services Tax 51 Act, 2 017 (Central Act No 13 of 2017) ]3 for or on behalf of distinct persons referred to in section 25, shall be required to be registered as Input Service Distributor under clause (viii) of section 24 and shall distribute the input tax credit in respect of such invoices. (2) The Input Service Distributor shall distribute the credit of State tax or integrated tax charged on invoices received by him, including the credit or State tax or integrated tax in respect of services subject to levy of tax under sub -section (3) or sub -section (4) of section 9 3[of this Act or under sub - section (3) or sub -section (4) of section 5 of the Integrated Goods and Services Tax Act, 2017 (Ce ntral Act No 13 of 2017),]3 paid by a distinct person registered in the same State as the said Input Service Distributor, in such manner, within such time and subject to restrictions and conditions as may be prescribed. (3) The credit of State tax shall be distributed as State tax or integratedtax and integrated tax as integrated tax or State tax, by way of issue of a document containing the amount of input tax credit, in such manner as may be prescribed. ]2

CHAPTER - VI REGISTRATION

22. Persons liable for registration. - (1) Every supplier making a taxable supply of goods or services or both in the State shall be liable to be registered under this Act if his aggregate turnover in a financial year exceeds twenty lakh rupee s: Provided that where such person makes taxable supplies of goods or services or both from any of the special category States, he shall be liable to be registered if his aggregate turnover in a financial year exceeds ten lakh rupees. 1[Provided further that, where such person makes taxable supplies of goods or services or both from a special category State in respect of which the Central Government has enhanced the aggregate turnover referred to in the first proviso, he shall be liable to be registered i f his aggregate turnover in a financial year exceeds the amount equivalent to such enhanced turnover.]1; 2[Provided also that, the Government may, on the recommendations of the Council, enhance the aggregate turnover from twenty lakh rupees to such amount not exceeding forty lakh rupees in case of supplier who is engaged exclusively in the supply of goods, subject to such conditions and limitations, as may be notified. Explanation. – For the purposes of this sub -section, a person shall be considered to be en gaged exclusively in the supply of goods even if he is engaged in exempt supply of services provided by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount.]2 (2) Every person who, on the day immediately preceding the appointed day, is registered or holds a license under an existing law, shall be liable to be registered under this Act with effect from the appointed day. (3) Where a business carried on by a taxable person registered under this A ct is 52 transferred, whether on account of succession or otherwise, to another person as a going concern, the transferee or the successor, as the case may be, shall be liable to be registered with effect from the date of such transfer or succession. (4) Notwithstanding anything contained in sub -sections (1) and (3), in a case of transfer pursuant to sanction of a scheme or an arrangement for amalgamation or, as the case may be, demerger of two or more companies pursuant to an order of a High Court, Tribun al or otherwise, the transferee shall be liable to be registered, with effect from the date on which the Registrar of Companies issues a certificate of incorporation giving effect to such order of the High Court or Tribunal. Explanation .––For the purposes of this section, –– (i) the expression ―aggregate turnover‖ shall include all supplies made by the taxable person, whether on his own account or made on behalf of all his principals; (ii) the supply of goods, after completion of job work, by a registered job worker shall be treated as the supply of goods by the principal referred to in section 143, and the value of such goods shall not be included in the aggregate turnover of the registered job worker; (iii) the expression ―special category States‖ shall mean the States as specified in sub-clause (g) of clause (4) of article 279A of the Constitution1[except the State of Jammu and Kashmir and States of Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand]1.

23. Persons not liable for registration. - (1) The following persons shall not be liable to registration, namely: –– a. any person engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax under this Act or under the Integrated Goods and Services Tax Act; b. an agriculturist, to the extent of supply of produce out of cultivation of land. 1[(2) Notwithstanding anything to the contrary contained in sub -section (1) of section 22 or section 24, the Government may, on the recommendations of the Council, by notification, subject to such conditions and restrictions as may be specified therein, specify the category of persons who may be exempt ed from obtaining registration under this Act.]1

24. Compulsory registration in certain cases. - Notwithstanding anything contained in sub -section (1) of section 22, the following categories of persons shall be required to be registered under this Act,- (i) persons making any inter-State taxable supply; (ii) casual taxable persons making taxable supply; (iii) persons who are required to pay tax under reverse charge; (iv) persons who are required to pay tax under sub-section (5) of section 9; (v) non-resident taxable persons making taxable supply; (vi) persons who are required to deduct tax under section 51, whether or not separately registered under this Act; (vii) persons who make taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise; (viii) Input Service Distributor, whether or not separately registered under this Act; 53 (ix) persons who supply goods or services or both, other than supplies specified under sub -section (5) of section 9, through such electronic commerce operator who is required to collect tax at source under section 52; (x) every electronic commerce operator1[who is required to collect tax at source under section 52]1; (xi) every person supplying online information and data base access or retrieval services from a place outside India to a person in India, other than a registered person;2[xxx]2 3[(xia) every person supplying online money gaming from a place outside India to a person in India; and".]3 (xii) such other person or class of persons as may be notified by the Government on the recommendations of the Council.

25. Procedure for registration. - (1) Every person who is liable to be registered under section 22 or section 24 shall apply for registration within thirty days from the date on which he becomes liable to registration, in such manner and subject to such conditions as may be prescribed: Provided that a casual t axable person or a non -resident taxable person shall apply for registration at least five days prior to the commencement of business. 1[Provided further that, a person having a unit, as defined in the Special Economic Zones Act, 2005 (Central Act 28 of 200 5), in a Special Economic Zone or being a Special Economic Zone developer shall have to apply for a separate registration, as distinct from his place of business located outside the Special Economic Zone in the State.]1; Explanation .- Every person who makes a supply from the territorial waters of India shall obtain registration in the State where the nearest point of the appropriate baseline is located in the State. (2) A person seeking registration under this Act shall be granted a single registration: 2[Provided that, a person having multiple places of business in the State may be granted a separate registration for each such place of business, subject to such conditions as may be prescribed.]2. (3) A person, though not liable to be registered under section 22 or section 24 may get himself registered voluntarily, and all provisions of this Act, as are applicable to a registered person, shall apply to such person. (4) A person who has obtained or is required to obtain more than one registration, whether in one State or Union territory or more than one State or Union territory shall, in respect of each such registration, be treated as distinct persons for the purposes of this Act. (5) Where a person who has obtained or is required to obtain registration in a State or Union territory in respect of an establishment, has an establishment in another State or Union territory, then such establishments shall be treated as establishments of distinct persons for the purposes of this Act. (6) Every person shall have a Permanent Account Number issued under the Income - tax Act, 1961 (Central Act 43 of 1961) in order to be eligible for grant of registration: Provided that a person required to deduct tax under section 51 may have, in lieu of a Permanent Account Number, a Tax Deduction and Collection Account Number issued under the said Act in order to be eligible for grant of registration. 3[(6A) Every registered person shall undergo authentication, or furnish proof of possession of Aadhaar number, in such form and manner and within such time as may be 54 prescribed: Provided that, if an Aadhaar number is not assigned to the registered person, such person shall be offered alternate and viable means of identification in such manner as the Government may, on the recommendations of the Council, prescribe: Provided further that, in case of failure to undergo authentication or furnish proof of possession of Aadhaar number or furnish alternate and viable means of identification, registration allotted to such person shall be deemed to be invalid and the other provisions of this Act shall apply as if such person does not have a registration. (6B) On and from the date of notification, every individual shall, in order to be eligible for grant of registration, undergo authentication, or furnish proof of possession of Aadhaar number, in such manner as the Government may, on the recommendations of the Council, specify in the said notification: Provided that, if an Aadhaar number is not assigned to an individual, such individual shall be offered alternate and viable means of identification in such manner as the Government may, on the recommendations of the Council, specify in the said notification. (6C) On and from the date of notification, every person, other than an individual, shall, in or der to be eligible for grant of registration, undergo authentication, or furnish proof of possession of Aadhaar number of the Karta, Managing Director, whole time Director, such number of partners, Members of Managing Committee of Association, Board of Trustees, authorised representative, authorised signatory and such other class of persons, in such manner, as the Government may, on the recommendation of the Council, specify in the said notification: Provided that, where such person or class of persons h ave not been assigned the Aadhaar Number, such person or class of persons shall be offered alternate and viable means of identification in such manner as the Government may, on the recommendations of the Council, specify in the said notification. (6D) The provisions of sub-section (6A) or sub -section (6B) or sub -section (6C) shall not apply to such person or class of persons or any State or Union territory or part thereof, as the Government may, on the recommendations of the Council, specify by notification. Explanation. - For the purposes of this section, the expression ―Aadhaar number‖ shall have the same meaning as assigned to it in clause (a) of section 2 of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 (Central Act 18 of 2016).]3 (7) Notwithstanding anything contained in sub -section (6), a non -resident taxable person may be granted registration under sub-section (1) on the basis of such other documents as may be prescribed. (8) Where a person who is liable to be registered under this Act fails to obtain registration, the proper officer may, without prejudice to any action which may be taken under this Act or under any other law for the time being in force, proceed to register such person in such manner as may be prescribed. (9) Notwithstanding anything contained in sub-section (1),–– (a) any specialised agency of the United Nations Organisation or any Multilateral Financial Institution and Organisation notified under the United Nations (Privileges and Immunities) Act, 1947 (Central Act 46 of 1947), Consulate or Embassy of foreign countries; and (b) any other person or class of persons, as may be notified by the Commissioner, shall be granted a Unique Identity Number in such manner and for such purposes, including refund of taxes on the notified supplies of goods or services or both received by them, as 55 may be prescribed. (10) The registration or the Unique Identity Number shall be grant ed or rejected after due verification in such manner and within such period as may be prescribed. (11) A certificate of registration shall be issued in such form and with effect from such date as may be prescribed. (12) A registration or a Unique Identity Number shall be deemed to have been granted after the expiry of the period prescribed under sub -section (10), if no deficiency has been communicated to the applicant within that period.

26. Deemed registration. - (1) The grant of registration or the Unique Identity Number under the Central Goods and Services Tax Act shall be deemed to be a grant of registration or the Unique Identity Number under this Act subject to the condition that the application for registration or the Unique Identity Number has not been rejected under this Act within the time specified in sub -section (10) of section 25. (2) Notwithstanding anythin g contained in sub-section (10) of section 25, any rejection of application for registration or the Unique Identity Number under the Central Goods and Services Tax Act shall be deemed to be a rejection of application for registration under this Act.

taxable person.

28. Amendment of registration. - (1) Every registered person and a person to whom a Unique Identity Number has been assigned shall inform the proper officer of any changes in the information furnished at the time of registration or subsequent thereto, in such form and manner and within such period as may be prescribed. (2) The proper officer may, on the basis of information furnished under sub-section (1) or as ascertained by him, approve or reject amendments in the registration particulars in such manner and within such period as may be prescribed: Provided that approval of the proper officer shall not be required in respect of amendment of such particulars as may be prescribed: Provided further that the proper officer shall not reject the application for amendment in the registration particulars without giving the person an opportunity of being heard. 56 (3) Any rejection or approval of amendments under the Ce ntral Goods and Services Tax Act shall be deemed to be a rejection or approval under this Act.

29. Cancellation1[or suspension]1 of registration. - (1) The proper officer may, either on his own motion or on an application filed by the registered person or by his legal heirs, in case of death of such person, cancel the registration, in such manner and within such period as may be prescribed, having regard to the circumstances where, –– a. the business has been discontinued, transferred fully for any reason including death of the proprietor, amalgamated with other legal entity, demerged or otherwise disposed of; or b. there is any change in the constitution of the business; or 2[(c) the taxable person is no longer liable to be registered under section 22 or se ction 24 or intends to opt out of the registration voluntarily made under sub-section (3) of section 25.]2 1[Provided that, during pendency of the proceedings relating to cancellation of registration filed by the registered person, the registration may be suspended for such period and in such manner as may be prescribed.]1; (2) The proper officer may cancel the registration of a person from such date, including any retrospective date, as he may deem fit, where, –– (a) a registered person has contravened such provisions of the Act or the rules made thereunder as may be prescribed; or (b) a person paying tax under section 10 has not furnished 3[the return for a financial year beyond three months from the due date of furnishing the said return]3; or (c) any registered person, other than a person specified in clause (b), has not furnished returns for 3[such continuous tax period as may be prescribed]3; or (d) any person who has taken voluntary registration under sub -section (3) of section 25 has not commenced business within six months from the date of registration; or (e) registration has been obtained by means of fraud, wilful misstatement or suppression of facts: Provided that the proper officer shall not cancel the registration without giving the person an opportunity of being heard. 1[Provided further that, during pendency of the proceedings relating to cancellation of registration, the proper officer may suspend the registration for such period and in such manner as may be prescribed.]1. (3) The cancellation of registration under this section shall not affect the liability of the person to pay tax and other dues under this Act or to discharge any obligation under this Act or the rules made thereunder for any period prior to the date of cancellation whether or not such tax and other dues are determined before or after the date of cancellation. (4) The cancellation of registration under the Central Goods and Services Tax Act shall be deemed to be a cancellation of registration under this Act. (5) Every registered person whose registration is cancelled shall pay an amount, by way of debit in the electronic credit ledger or electronic cash ledger, equivalent to the credit of input tax in respect of inputs held in stock and inputs contained in semi -finished or finished goods held in stock or capital goods or plant and machinery on the day immediately preceding the date of such cancellation or the output tax payable on such goods, whichever is higher, calculated in such manner as may be prescribed: 57 Provided that in case of capital goods or plant and machinery, the taxable person shall pay an amount equal to the input tax credit taken on the said capital goods or plant and machinery, reduced by such percentage points as may be prescribed or the tax on the transaction value of such capital goods or plant and machinery under section 15, whichever is higher. (6) The amount payable under sub -section (5) shall be calculated in such manner as may be prescribed.

30. Revocation of cancellation of registration. - (1) Subject to such conditions as may be prescribed, any registered person, whose registration is cancelled by the proper officer on his own motion, may apply to such officer for revocation of cancellation of the registration in 3[such manner, within such time and subject to such conditions and restrictions, as may be prescribed]3. 4[2[1[XXX ]1]2]4. vide order no. 05/2019 No.FD 47 CSL 2017, Bengaluru, dated 23.04.2019 (2) The proper officer may, in such manner and within such period as may be prescribed, by order, either revoke cancellation of the registration or reject the application: Provided that the application for revocation of cancellation of registration shall not be rejected unless the applicant has been given an opportunity of being heard. 1[Provided further that, such revocation of cancellation of registration shall be subject to such conditions and restrictions, as may be prescribed.]1 . 1. Inserted by Act 02 of 2025 w.e.f ……………………………... (3) The revocation of cancellation of registration under the Central Goods and Services Tax Act shall be deemed to be a revocation of cancellation of registration under this Act. CHAPTER - VII TAX INVOICE, CREDIT AND DEBIT NOTES

1. (1) A registered person supplying taxable goods shall, before or at the time of,––
   • (a) removal of goods for supply to the recipient, where the supply involves

movement of goods; or

1. (b) delivery of goods or making available thereof to the recipient, in any other case,

Provided that the Government may, on the recommendations of the Council, by notification, specify the categories of goods or supplies in respect of which a tax invoice shall

be issued, within such time and in such manner as may be prescribed.

1. (2) A registered person supplying taxable services shall, before or after the provision of service but within a prescribed period, issue a tax invoice, showing the description, value,

tax charged thereon and such other particulars as may be prescribed:

2[ Provided that, the Government may, on the recommenda tions of the Council, by notification, - 58

1. (a) ) specify the categories of services or supplies in respect of which a

tax invoice shall be issued, within such time and in such manner as may

be prescribed;

1. (b) ) subject to the condition mentioned therein, specify the categories of services in respect of which, - ( i ) any other document issued in relation to the supply shall be deemed to be a tax invoice; or

( i i ) tax invoice may not be issued.]2

1. (3) Notwithstanding anything contained in sub-sections
2. (1) and (2)––
   • (a) a registered person may, within one month from the date of issuance of certificate of registration and in such manner as may be prescribed, issue a revised invoice against the invoice already issued during the period beginning with the effective date of regi stration till the date of

issuance of certificate of registration to him;

1. (b) a registered person may not issue a tax invoice if the value of the goods or services or both supplied is less than two hundred rupees subject to

such conditions and in such manner as may be prescribed;

1[(c) a registered person supplying exempted goods or services or both or

Provided that the registered person may not issue a bill of supply if the value of the goods or services or both supplied is less than two hundred rupees subject to such conditions and in such manner as may be prescribed;]1

1. (d) a registered person s hall, on receipt of advance payment with respect to any supply of goods or services or both, issue a receipt voucher or any other document, containing such particulars as may be prescribed, evidencing receipt of such payment;
2. (e) where, on receipt of advance payment with respect to any supply of

goods or services or both the registered person issues a receipt

voucher, but subsequently no supply is made and no tax invoice is issued in pursuance thereof, the said registered person may issue to the

person who had made the payment, a refund voucher against such

payment;

1. (f) a registered person who is liable to pay tax under sub -section (3) or sub-

1. (g) a registered person who is liable to pay tax under sub -section (3) or sub- section (4) of section 9 shall issue a payment voucher at the time of

registered‖ shall include the supplier who is registered solely for the purpose of deduction of tax under section 51.]3

1. (4) In case of continuous supply of goods, where successive statements of accounts or successive payments are involved, the invoice shall be issued before or at the time each

such statement is issued or, as the case may be, each such payment is received.

59

1. (5) Subject to the provisions of clause (d) of sub -section (3), in case of continuous

supply of services, ––

1. (a) where the due date of payment is ascertainable from the contract, the

invoice shall be issued on or before the due date of payment;

1. (b) where the due date of payment is not ascertainable from the contract, the invoice shall be issued before or at the time when the supplier of service receives the payment;
2. (c) where the payment is linked to the completion of an event, the invoice

shall be issued on or before the date of completion of that event.

1. (6) In a case where the supply of services ceases under a contract before the completion of the supply, the invoice shall be issued at the time when the supply ceases and

such invoice shall be issued to the extent of the supply made before such cessation.

1. (7) Notwithstanding anything contained in sub -section (1), where the goods being sent or taken on approval for sale or return are removed before the supply takes place, the

Explanation .––For the purposes of this section, the expression ―tax invoice‖ shall

include any revised invoice issued by the supplier in respect of a supply made earlier.

1. Please see the clarification pertaining to clause (C) of Sub -Section (3) of Section 31 in the Karnataka Goods and Service Tax (Removal of Difficulties) order 2019 issued vide order No FD 47 CSL dated 08.03.2019.

1[31A. Facility of digital payment to recipient. - The Government may, on the

recommendations of the Council, prescribe a class of registered persons who shall provide

prescribed modes of electronic payment to the rec ipient of supply of goods or services or

both made by him and give option to such recipient to make payment accordingly, in such

manner and subject to such conditions and restrictions, as may be prescribed.]1

32. Prohibition of unauthorised collection of tax. - (1) A person who is not a registered person shall not collect in respect of any supply of goods or services or both any amount by way of tax under this Act. (2) No registered person shall collect tax except i n accordance with the provisions of this Act or the rules made thereunder.

33. Amount of tax to be indicated in tax invoice and other documents. - Notwithstanding anything contained in this Act or any other law for the time being in force, where any supply is made for a consideration, every person who is liable to pay tax for such supply shall prominently indicate in all documents relating to assessment, tax invoice and other like documents, the amount of tax which shall form part of the price at which such supply is made.

34. Credit and debit notes. - (1) 1[Where one or more tax invoices have]1been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to exceed the taxable value or tax payable in respec t of such supply, or where the goods supplied are returned by the recipient, or where goods or services or both supplied are found to be deficient, the registered person, who has supplied such goods or services or both, may issue to the recipient 1[one or more credit notes for supplies made in a financial year]1containing such particulars as may be prescribed. (2) Any registered person who issues a credit note in relation to a supply of goods or 60 services or both shall declare the details of such credit note in the return for the month during which such credit note has been issued but not later than 2[the thirtieth day of November]2 following the end of the financial year in which such supply was made, or the date of furnishing of the relevant annual return, whi chever is earlier, and the tax liability shall be adjusted in such manner as may be prescribed: 3[Provided that no reduction in output tax liability of the supplier shall be permitted, if the - (i) input tax credit as is attributable to such a credit note, if availed, has not been reversed by the recipient, where such recipient is a registered person; or (ii) incidence of tax on such supply has been passed on to an y other person, in other cases.]3 (3) 1[Where one or more tax invoices have]1 been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to be less than the taxable value or tax payable in respect of such supply, the registered person, who has supplied such goods or services or both, shall issue to the recipient 1[one or more debit notes for supplies made in a financial year]1a debit note containing such particulars as may be prescribed. Any registered person who issues a debit note in relation to a supply of goods or services or both shall declare the details of such debit note in the return for the month during which such debit note has been issued and the tax liability shall be adjusted in such manner as may be prescribed. Explanation .–– For the purposes of this Act, the expression ―debit note‖ shall include a supplementary invoice. CHAPTER VIII ACCOUNTS AND RECORDS