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Input Tax Credit under GST – Conditions To Claim
How to utlilise Input Tax Credit under GST – Order of adjustment

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“Input Tax” in relation to a taxable person, means the Goods and Services Tax charged on any supply of goods and/or services to him which are used or are intended to be used, during furtherance of his business. Fulfillment of Input Tax Credit under GST – Conditions To Claim is one of the most critical activity for every business to settle its tax liability.

ITC being the backbone of GST and a major matter of concern for the registered persons, conditions for eligibility to ITC and eligible ITC have been prescribed which in majority in line with pre- GST regime. These rules are also quite particular and stringent in its approach.


Input Tax Credit under GST – Conditions To Claim

A registered person will be eligible to claim Input Tax Credit (ITC) on fulfillment of the following conditions:

  • 1. Possession of a tax invoice or debit note or document evidencing payment
  • 2. Receipt of goods and/or services
  • 3. goods delivered by supplier to other person on the direction of registered person against a document of transfer of title of goods
  • 4. Furnishing of a return
  • 5. Where goods are received in lots or installments ITC will be allowed to be availed when the last lot or installment is received.
  • 6. Failure to the supplier towards supply of goods and/or services within 180 days from the date of invoice, ITC already claimed will be added to output tax liability and interest to paid on such tax involved. On payment to supplier, ITC will be again allowed to be claimed
  • 7. No ITC will be allowed if depreciation have been claimed on tax component of a capital good
  • 8. If invoice or debit note is received after the due date of filing return for September of next financial year or filing annual return whichever Is later
  • No ITC will be allowed
  • 9. Common credit of ITC used commonly for
  • • Effecting exempt and taxable supplies
  • • Business and non-business activity
  • Credit will be allowed according to the RULES

How to utlilise Input Tax Credit under GST – Order of adjustment

GST-GST-input tax credit

To pay IGST --- all input credits --IGST, CGST & SGST

To pay CGST----- IGST & CGST

To pay SGST --- IGST & SGST

SGST refers to the State of the Supplier.

Tax whether on Purchase of Goods or On Services will have same treatment

Important Note : SGST of own state only can be utilised. In other words input credit SGST ( Tamilnadu) cannot be used to pay output tax SGST of Karnataka

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