The correct answer is: A. 1 year from the date of invoice
Under the Goods and Services Tax (GST) regime, a registered person can avail input tax credit on inputs lying in stock on the date of obtaining registration, voluntary registration, change of scheme from composition to regular scheme and from exempted goods/services to taxable goods/services. The time limit for taking said credit is 1 year from the date of invoice.
The input tax credit is a mechanism that allows businesses to claim a credit for the GST they have paid on their inputs. This credit can then be used to offset the GST they owe on their outputs. The input tax credit is a key feature of the GST regime, as it helps to reduce the overall tax burden on businesses.
The time limit for taking input tax credit is 1 year from the date of invoice. This means that businesses have 1 year from the date they receive an invoice for an input to claim the input tax credit. If they do not claim the credit within this time limit, they will not be able to claim it at all.
There are a few exceptions to the 1-year time limit for taking input tax credit. For example, if a business is unable to claim the credit within the 1-year time limit due to circumstances beyond its control, it may be able to apply for an extension. Additionally, if a business ceases to exist within the 1-year time limit, the credit may be transferred to another business.
The input tax credit is a valuable tool that can help businesses to reduce their tax burden. Businesses should be aware of the time limit for taking input tax credit and make sure to claim the credit within this time limit.
Here is a brief explanation of each option:
- Option A: 1 year from the date of invoice. This is the correct answer.
- Option B: 3 year from the date of invoice. This is incorrect. The time limit for taking input tax credit is 1 year from the date of invoice.
- Option C: 5 year from the date of invoice. This is incorrect. The time limit for taking input tax credit is 1 year from the date of invoice.
- Option D: None of the above. This is incorrect. The correct answer is A.