Text
The text below is the section as served by the CBIC tax information portal on 17 September 2026, with the portal's own amendment footnote markers (shown as small numerals before a bracket) and its footnotes.[1] The Act as published in the Gazette of India is the legal source.
Section 41, verbatim (show)
*Section 41. 1[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.]
* Enforced w.e.f. 22nd June, 2017.
1. Substituted (w.e.f. 1st October, 2022 vide Notification No. 18/2022 - CT) by s. 106 of The Finance Act 2022 (No. 6 of 2022) for
"Section 41. Claim of input tax credit and provisional acceptance thereof.
(1) Every registered person shall, subject to such conditions and restrictions as may be prescribed, be entitled to take the credit of eligible input tax, as self-assessed, in his return and such amount shall be credited on a provisional basis to his electronic credit ledger.
(2) The credit referred to in sub-section (1) shall be utilised only for payment of self-assessed output tax as per the return referred to in the said sub-section."
Sub-section (1)
41(1), entitlementEligible credit in the return
be entitled to avail the credit of eligible input tax, as self-assessed, in his returnSection 41(1), entitlement
A registered person takes eligible credit through self-assessment in the return. Eligibility is linked to sections 16 and 17.
Questions to answer on the file7 questions
41(1), conditionsPrescribed conditions and restrictions
Every registered person shall, subject to such conditions and restrictions as may be prescribedSection 41(1), conditions
Prescribed conditions and restrictions govern availment by the registered person. The linked documentary rule is rule 36.
41(1), ledgerElectronic credit ledger
such amount shall be credited to his electronic credit ledgerSection 41(1), ledger
The amount follows the eligible credit self-assessed in the return. Section 49(2) links the ledger entry to section 41.
Sub-section (2)
41(2), reversalSupplier non-payment
the tax payable whereon has not been paid by the supplier, shall be reversed along with applicable interestSection 41(2), reversal
The registered person must reverse credit availed under sub-section (1) on the supplies concerned. Reversal follows the prescribed manner. The law does not settle how the recipient establishes whether the supplier paid that tax.
Questions to answer on the file5 questions
41(2), interestInterest with reversal
shall be reversed along with applicable interest, by the said person in such manner as may be prescribedSection 41(2), interest
The interest requirement accompanies reversal for supplier non-payment. The law does not settle its rate or starting date for credit that became reversible on that ground.
41(2), provisoRe-availment after supplier payment
the said registered person may re-avail the amount of credit reversed by him in such manner as may be prescribedSection 41(2), proviso
The supplier must pay the tax on the supplies for which credit was reversed. The registered person may then re-avail that reversed amount in the prescribed manner.
Questions to answer on the file5 questions
Other questions to answer on the file
Questions a reviewer answers from the engagement file, grouped by the part of the section they come from. They describe what the section asks; they do not decide it.
Which wording governs the period under test footnote 1 to section 41
Questions to answer on the file1 question
Frequently asked questions
Where is self-assessed eligible credit taken?
The registered person avails it in the return, and the amount is credited to the electronic credit ledger. Prescribed conditions and restrictions apply.
Section 41(1)
How does a recipient establish that the supplier paid the tax?
The law does not settle how the recipient establishes supplier payment. The reversal requirement turns on non-payment of tax on the supplies concerned.
Section 41(2)
Which interest rate and starting date apply to reversal?
The law does not settle the applicable rate or starting date here. Sub-section (2) requires reversal with applicable interest in the prescribed manner.
Section 41(2)
What permits reversed credit to be taken again?
The supplier's payment of tax on the supplies permits re-availment of the reversed amount. The registered person must follow the prescribed manner.
Section 41(2), proviso
Amendment history
The CBIC text carries 2 footnotes. The table gives each in the source's own terms. Effective dates are as the footnotes state them.[1]
| Note | Change | Instrument | Effective from | Retrospective? |
|---|---|---|---|---|
| Brings the section into force | Notification No. 09/2017-Central Tax dated 28th June, 2017[2] | 1 July 2017; the source's note reads 22nd June, 2017, which is wrong for this section | no | |
| 1 | Substitutes the whole section, heading and both sub-sections, replacing provisional acceptance and the restriction on utilisation with an entitlement to avail, a duty to reverse where the supplier has not paid the tax, and a proviso allowing re-availment. The source preserves the replaced wording inside the footnote. | section 106 of The Finance Act 2022 (No. 6 of 2022), notified by Notification No. 18/2022 - CT[3][4] | 1 October 2022 | no |
Relationship with other provisions
| Provision | Connection | Words that tie them |
|---|---|---|
| Section 16 | Section 16 16(2)(c) overridden by this provision | 16(2)(c) "subject to the provisions of section 41, the tax charged in respect of such supply has been actually paid to the Government" |
| Rule 36 of the CGST Rules, 2017 | 41(1) prescribed by rule 36 of the CGST Rules 2017 | 41(1) "subject to such conditions and restrictions as may be prescribed" |
| Section 39 | 41(1) requires Section 39 | 41(1) "as self-assessed, in his return" |
| Section 2 | 41(1) defined by Section 2 clause (62) | 41(1) "the credit of eligible input tax"; clause (62) defines "input tax" |
| Section 2 | 41(1) defined by Section 2 clause (46) | 41(1) "such amount shall be credited to his electronic credit ledger"; clause (46) carries it to sub-section (2) of section 49 |
| Section 16, Section 17 | 41(1) requires Section 16 and Section 17 | 41(1) "the credit of eligible input tax"; the Act nowhere defines "eligible", and those two sections are where eligibility is decided |
| Rule 37A of the CGST Rules, 2017 | 41(2) prescribed by rule 37A of the CGST Rules 2017 | 41(2) "shall be reversed along with applicable interest, by the said person in such manner as may be prescribed" |
| Rule 37A of the CGST Rules, 2017 | the proviso to 41(2) prescribed by the second proviso to rule 37A of the CGST Rules 2017 | the proviso to 41(2) "may re-avail the amount of credit reversed by him in such manner as may be prescribed" |
Circulars and notifications
Circulars and notifications in the CBIC repository that cite this section, newest first, by number, date and subject. A listing here does not say what an instrument decides; read the instrument.
Circulars (2)
| Number | Date | Subject |
|---|---|---|
| Circular No. 197/09/2023-GST | 17 July 2023 | Clarification on refund-related issues |
| Circular No. 7/07/2017-GST | 1 September 2017 | System based reconciliation of information furnished in FORM GSTR-1 and FORM GSTR-2 with FORM GSTR-3B - regarding. |
Notifications (1)
| Number | Date | Subject |
|---|---|---|
| Notification No. 10/2017-Central Tax | 28 June 2017 | Seeks to amend CGST Rules notification no 3/2017-Central Tax dt 19.06.2017 amended by a later instrument |
Unsettled questions
The words of section 41 do not answer these questions. Where one decides a matter on the file, the answer depends on the position taken on it.
- How is a recipient to establish whether the tax payable on the supply has been paid by the supplier, when the Act gives him no means of seeing the supplier's payment? Sub-section (2) makes the reversal turn on that fact and says nothing about how the recipient is to know it. The position already exists on this question and is reused, not duplicated.
- From what date, and at what rate, does the "applicable interest" under sub-section (2) run on credit that was validly availed under sub-section (1) and became reversible only because the supplier did not pay? The sub-section requires interest, does not say which interest is applicable, and fixes no date from which it runs.
See also
- Section 16 of the CGST Act, 2017: eligibility and conditions for taking input tax credit
- Section 17 of the CGST Act, 2017: apportionment of credit and blocked credits
- Section 39 of the CGST Act, 2017: furnishing of returns
- Section 49 of the CGST Act, 2017: payment of tax, interest, penalty and other amounts
- Rule 36 of the CGST Rules, 2017: documentary requirements and conditions for claiming input tax credit
- Rule 37A of the CGST Rules, 2017: reversal of input tax credit in the case of non-payment of tax by the supplier and re-availment thereof
References
- Central Board of Indirect Taxes and Customs. "Section 41. Availment of input tax credit". Central Goods and Services Tax Act, 2017, CBIC tax information portal, with amendment footnotes 1 to 2. Retrieved 17 September 2026.
- Notification No. 09/2017-Central Tax, dated 28 June 2017: Seeks to bring into force certain sections of the CGST Act, 2017 w.e.f 01.07.2017. Cited in CBIC footnote *.
- The Finance Act, 2022. Cited in CBIC footnote 1.
- Notification No. 18/2022-Central Tax, dated 28 September 2022: Seeks to notify 01.10.2022 as the date on which provisions of sections 100 to 114, except clause (c) of section 110 and section 111 of Finance Act, 2022 shall come into force. Cited in CBIC footnote 1.
External links
- CGST Act, 2017, Section 41 on the CBIC tax information portal