Text
The text below is the rule 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 Rules as published in the Gazette of India is the legal source.
Rule 40, verbatim (show)
Rule 40
Rule 40. Manner of claiming credit in special circumstances.-
(1) The input tax credit claimed in accordance with the provisions of sub-section (1) of section 18 on the inputs held in stock or inputs contained in semi-finished or finished goods held in stock, or the credit claimed on capital goods in accordance with the provisions of clauses (c) and (d) of the said sub-section, shall be subject to the following conditions, namely,-
(a) the input tax credit on capital goods, in terms of clauses (c) and (d) of sub-section (1) of section 18, shall be claimed after reducing the tax paid on such capital goods by five percentage points per quarter of a year or part thereof from the date of the invoice or such other documents on which the capital goods were received by the taxable person.
1[(b) the registered person shall within a period of thirty days from the date of becoming eligible to avail the input tax credit under sub-section (1) of section 18, or within such further period as may be extended by the Commissioner by a notification in this behalf, shall make a declaration, electronically, on the common portal in FORM GST ITC-01 to the effect that he is eligible to avail the input tax credit as aforesaid:
Provided that any extension of the time limit notified by the Commissioner of State tax or the Commissioner of Union territory tax shall be deemed to be notified by the Commissioner.]
(c) the declaration under clause (b)shall clearly specify the details relating to the inputs held in stock or inputs contained in semi-finished or finished goods held in stock, or as the case may be, capital goods-
(i) on the day immediately preceding the date from which he becomes liable to pay tax under the provisions of the Act, in the case of a claim under clause (a) of sub-section (1) of section 18;
(ii) on the day immediately preceding the date of the grant of registration, in the case of a claim under clause (b) of sub-section (1) of section 18;
(iii) on the day immediately preceding the date from which he becomes liable to pay tax under section 9, in the case of a claim under clause (c) of subsection (1) of section 18;
(iv) on the day immediately preceding the date from which the supplies made by the registered person becomes taxable, in the case of a claim under clause (d) of sub-section (1) of section 18;
(d) the details furnished in the declaration under clause (b) shall be duly certified by a practicing chartered accountant or a cost accountant if the aggregate value of the claim on account of central tax, State tax, Union territory tax and integrated tax exceeds two lakh rupees;
(e) the input tax credit claimed in accordance with the provisions of clauses (c) and (d) of sub-section (1) of section 18 shall be verified with the corresponding details furnished by the corresponding supplier in FORM GSTR-1 2[and in FORM GSTR-1A, if any,] or as the case may be, in FORM GSTR- 4, on the common portal.
(2) The amount of credit in the case of supply of capital goods or plant and machinery, for the purposes of sub-section (6) of section 18, shall be calculated by reducing the input tax on the said goods at the rate of five percentage points for every quarter or part thereof from the date of the issue of the invoice for such goods.
1. Substituted (w.e.f. 01.07.2017) vide Notification No. 22/2017 - CT dated 17.08.2017.
2. Inserted vide Notification No. 12/2024 - CT dated 10.07.2024.
Questions to answer on the file
Questions a reviewer answers from the engagement file, grouped by the part of the rule they come from. They describe what the rule asks; they do not decide it.
Claim category and special circumstance 40(1) opening
Questions to answer on the file2 questions
Capital-goods onset reduction 40(1)(a)
Questions to answer on the file10 questions
ITC-01 declaration form and channel 40(1)(b)
Questions to answer on the file5 questions
Thirty-day or notified extended declaration period 40(1)(b) and proviso
Questions to answer on the file9 questions
Stock details on the prior day for section 18(1)(a) 40(1)(c)(i)
Questions to answer on the file7 questions
Stock details on the prior day for section 18(1)(b) 40(1)(c)(ii)
Questions to answer on the file7 questions
Stock details on the prior day for section 18(1)(c) 40(1)(c)(iii)
Questions to answer on the file7 questions
Stock details on the prior day for section 18(1)(d) 40(1)(c)(iv)
Questions to answer on the file7 questions
Whole-declaration certification threshold 40(1)(d)
Questions to answer on the file11 questions
Corresponding supplier-detail verification 40(1)(e)
Questions to answer on the file9 questions
Capital-goods supply quarter-reduction arithmetic 40(2)
Questions to answer on the file9 questions
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 |
|---|---|
| 1 | Substituted (w.e.f. 01.07.2017) vide Notification No. 22/2017 - CT dated 17.08.2017.[2] |
| 2 | Inserted vide Notification No. 12/2024 - CT dated 10.07.2024.[3] |
Relationship with other provisions
| Provision | Connection | Words that tie them |
|---|---|---|
| Section 18 of the CGST Act, 2017 | Section 18 of the CGST Act, 2017 (1),(5) prescribed by this provision (1) | 18(1) "Subject to such conditions and restrictions as may be prescribed"; 18(5) "calculated in such manner as may be prescribed" |
| Section 18 of the CGST Act, 2017 | Section 18 of the CGST Act, 2017 (6) prescribed by this provision (2) | 18(6) "reduced by such percentage points as may be prescribed" |
| Section 18 of the CGST Act, 2017 | this provision requires Section 18 of the CGST Act, 2017 (1),(2),(6) | 40(1) "sub-section (1) of section 18"; 18(2) "after the expiry of one year"; 40(2) "sub-section (6) of section 18" |
| Section 9 of the CGST Act, 2017 | this provision requires Section 9 of the CGST Act, 2017 | 40(1)(c)(iii) "liable to pay tax under section 9" |
| Rule 59 | this provision requires Rule 59 | 40(1)(e) "FORM GSTR-1"; 40(1)(e) "FORM GSTR-1A" |
| Rule 62 | this provision requires Rule 62 | 40(1)(e) "FORM GSTR- 4" |
| Rule 44 | this provision (2) requires Rule 44 (6) | 44(6) "for the purposes of sub-section (6) of section 18"; 44(6) "same manner as specified in clause (b) of sub-rule (1)" |
Circulars and notifications
Circulars and notifications in the CBIC repository that cite this rule, newest first, by number, date and subject. A listing here does not say what an instrument decides; read the instrument.
Notifications (7)
| Number | Date | Subject |
|---|---|---|
| Notification No. 12/2024-Central Tax | 10 July 2024 | Seeks to make amendments (Amendment, 2024) to the CGST Rules, 2017. |
| Notification No. 42/2018-Central Tax | 4 September 2018 | Seeks to extend the time limit for making the declaration in FORM GST ITC-01 for specified classes of taxpayers |
| Notification No. 67/2017-Central Tax | 21 December 2017 | Seeks to extend the time limit for filing FORM GST ITC-01 |
| Notification No. 52/2017-Central Tax | 28 October 2017 | Seeks to extend the due date for submission of details in FORM GST-ITC-01 |
| Notification No. 44/2017-Central Tax | 13 October 2017 | Seeks to extend the time limit for submission of FORM GST ITC-01 superseded by a later instrument |
| Notification No. 22/2017-Central Tax | 17 August 2017 | Seeks to amend the CGST Rules, 2017 |
| 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 Rule 40 do not answer these questions. Where one decides a matter on the file, the answer depends on the position taken on it.
- How are quarters and parts of a quarter counted for the identified statutory interval, including calendar boundaries, without assuming a rolling or financial-quarter convention?
- What makes the identified furnished declaration/details duly certified, where the rule states no certification scope or assurance standard? Assess actual certification evidence without treating a firm view as adopted.
- Does practicing qualify cost accountant as well as chartered accountant in Rule 40(1)(d), which says a practicing chartered accountant or a cost accountant? Both-practising cases do not depend on resolving this wording.
- How do Rule 40(2) quarter reduction and Rule 44(6) remaining-month reduction interact for the same section 18(6) capital-goods supply when their figures differ? Neither method is silently selected over the other.
- Which end date governs the Rule 40(1)(a) quarter reduction where the eligibility event and actual claim dates differ, when the text specifies from the invoice/other-document date but gives no express ending event?
See also
- Section 18 of the CGST Act, 2017: availability of credit in special circumstances
- Rule 44 of the CGST Rules, 2017: manner of reversal of credit under special circumstances
- Rule 59 of the CGST Rules, 2017: form and manner of furnishing details of outward supplies
References
- Central Board of Indirect Taxes and Customs. "Rule 40. Manner of claiming credit in special circumstances". Central Goods and Services Tax Rules, 2017, CBIC tax information portal, with amendment footnotes 1 to 2. Retrieved 17 September 2026.
- Notification No. 22/2017-Central Tax, dated 17 August 2017: Seeks to amend the CGST Rules, 2017. Cited in CBIC footnote 1.
- Notification No. 12/2024-Central Tax, dated 10 July 2024: Seeks to make amendments (Amendment, 2024) to the CGST Rules, 2017. Cited in CBIC footnote 2.
External links
- CGST Rules, 2017, Rule 40 on the CBIC tax information portal