ITC: Input Tax Credit

ITC means credit of input tax.

Input tax means the central tax, State tax, integrated tax, or Union territory tax paid on receipt of goods or services from the registered person.

ITC can only be claimed under GST if its conditions are followed properly. ITC is the backbone of GST and a very important subject for registered taxpayers. Thus, its eligibility is also a matter of concern for them. Next, we’ll know what are the conditions to be fulfilled to avail input tax credit.

One must be careful about booking the ITC, below mentioned conditions to be fulfilled for claiming ITC

• Both the person i.e. supplier and recipient must be an eligible registered person under GST.
• Having possession of a tax invoice or debit note issued by a supplier of goods or services.
• Supplier has furnished the details of the invoice or debit note in the statement of outward supplies i.e. GSTR 1 and the same are available to the recipient in GSTR 2B.
• Recipient himself or another person on his direction has received goods or services or both.
• Tax has been actually paid to the government via GSTR 3B.
• Recipient has furnished a return i.e. GSTR 3B in the prescribed timeline.
• If the recipient fails to make payment to the supplier within 180 days from the date of invoice, then ITC available to the recipient shall be added back to his output tax liability along with interest thereon.

ITC Reversal

How to obtain GST Registration?