CS Professional Important topic of GST INPUT TAX CREDIT (ITC)

CS Professional Important topic of GST INPUT TAX CREDIT (ITC)

CS Professional Important topic of GST INPUT TAX CREDIT (ITC)

The input tax credit is the type of credit that manufacturers received for paying input taxes towards goods used in the manufacture of products. Similarly, a dealer is entitled to the input tax credit if he has purchased goods for resale purpose.


  • Only the registered person can take the credit for input, on such condition that input tax credit on the supply of goods or services are intended to be used in course and furtherance of business and the amount will be credited to the electronic ledger of such person
  1. Have possession of a tax invoice or debit note issued by a supplier registered under this act.
  2. Has received the goods or service or both.
  3. The tax which is charged with such apply should actually be paid to the government, either in cash or through the utilization of input tax credit
  4. Has furnished the return under section 39

The following document should be there to claim an input tax credit by the registered person:-

  1. An invoice issued by the supplier of goods or services or both in accordance with the act
  2. An invoice issued in accordance with sec 31 that is under reverse charge
  3. A debit note issued by the supplier
  4. A bill of entry as per the custom act,1962
  5. An input service distributor invoice input service distributor credit note
  • The input tax credit can only be claimed if the applicant submits the required application along with required documents in form no. GSTR-2.
  • If there is a demand which is confirmed as a fraud, willful misstatement then the applicant will not be allowed input tax credit on any extent
  • If the goods received against any order received in allotment then the input tax credit will receive in the allotment.
  • Reversal of input tax credit should be done if payment for the invoice is not done within 180 days of issuance of the invoice
  • In case if payment is done after 180 days, the recipient shall be entitled to avail the credit of input tax on payment made by him towards the value of goods and services
  • If the registered person has claimed depreciation on the tax component of capital goods then no input tax credit will be allowed to the applicant
  • There is a specific time limit for availing input tax credit, after passing that date credit will not be allowed. If the person has to claim the input tax credit on debit note or supply of goods or service before the furnishing of return under section 39 for the month of September following the end of the financial year to which such invoice relates or furnishing of annual return, whichever is earlier

Let take an example to understand this:-

Date of an invoice for the supply of such goods: – 10.04.2018

Date of furnishing return in the month of September: – 20.10.2019

ANNUAL RETURN FOR 2018-2019: – 28.10.2019


In this case, the time limit for the availing input tax credit will be 20.10.2019

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CS Professional Important topic of GST INPUT TAX CREDIT (ITC) CS Professional Important topic of GST INPUT TAX CREDIT (ITC) CS Professional Important topic of GST INPUT TAX CREDIT (ITC) CS Professional Important topic of GST INPUT TAX CREDIT (ITC)CS Professional Important topic of GST INPUT TAX CREDIT (ITC)

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September 3, 2019

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