Input Tax Credit - GST Registration, GST cancellation, GST Return Filing

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Input Tax Credit

Input Tax Credit

  • Input Tax credit will be allowed only to registered persons
  • Proportionate credit in case certain goods are used for business as well as non-business purposes
  • CGST credit under a registration obtained in a particular State cannot be automatically adjusted against the CGST payable under another registration obtained in another State

List of admissible and inadmissible input tax credit

• Input
• raw material
• goods used in factory, office
• mobile phones provided to employees
• stationery, and other consumables
• safety material
• goods used in erection commissioning of plant and
• Capital Goods
• Furniture, Office Equipments
•Motor Vehicle used for transportation of goods
• Structures, structural supports
• All Input Services

• Goods/Services used for effecting exempt supplies
• Goods lost, stolen, destroyed, written off, gifted , provided free of cost,
• Goods used for construction of land, building or any other civil structure, telecommunication tower, pipeline laid outside the factory.
• food and beverages, outdoor catering unless the same is used for the purposes of further business in F&B
• Motor vehicles unless used for transportation of goods
• Goods/ Services used for personal onsumption
• Tax paid after demand made by department
• Tax paid on detention, seizure on goods and conveyance in transit.
• Tax paid on goods or conveyance confiscated.
• GST paid under the composition scheme
• beauty treatment,
• health services, cosmetic and plastic surgery
• membership of a club, health and fitness centre
• Bus transport to employees, auditors or others in relation to business
• rent-a-cab, life insurance, health insurance except where obligatory as per government notification.
• travel benefits extended to employees on vacation such as leave or home travel concession.
• Works Contract Services, Construction services for construction of immovable property even when used in course or furtherance of business.

Conditions for claim input credit
  • The buyer must possess a valid tax invoice, debit note, B/Entry, Reverse Charge invoice, ISD invoice, or other prescribed document issued by a registered dealer
  • The buyer must have received the good or service. If the product is being received in installments, then the credit can be claimed against the tax invoice for the last installment
  • Payment to vendor is mandatory within 180 days
  • ITC can only be claimed for tax invoices and debit notes which are less than 365 days old or before filing a relevant annual return, whichever is earlier
  • If the input tax credit claims related to an invoice or a debit note is not reflected in FORM GSTR2A, then the amount of ITC claim will be restricted to 10%  of the eligible credit available

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