Documents required and conditions for claiming ITC in GST Regime

Documents required and conditions for claiming ITC in GST Regime: Input tax credit means the credit available in the Electronic Ledger (E-Cash Ledger or E-Credit Ledger) of a Registered Person in the form of Central tax (CGST), State tax (SGST), integrated tax (IGST) or Union territory tax (UTGST) charged on supply of goods or services or both made to another Registered Person. It includes tax paid on reverse charge basis and IGST charged on Import of Goods but does not include tax paid under composition levy.

The input tax credit shall be availed by a registered person, including the Input Service Distributor, on the basis of any of the following documents, namely:-

  • (a) an invoice issued by the supplier of goods or services or both in accordance with the provisions of section 31;
  • (b) a debit note issued by a supplier in accordance with the provisions of section 34;
  • (c) a bill of entry;
  • (d) an invoice issued in accordance with the provisions of clause (f) of sub-section (3) of section 31;
  • (e) a document issued by an Input Service Distributor in accordance with the provisions of sub-rule (1) of rule invoice.7;
  • (f) a document issued by an Input Service Distributor, as prescribed in clause
  • (g) of sub-rule (1) of rule 4.

The document should contain all the prescribed particulars and the details are to be furnished in FORM GSTR-2.

3. ITC is not available on any tax paid in pursuance of order demanded on account of fraud, willful misstatement or suppression of facts

4. Registered Person should have received the goods or service. If received in lots or instalments Registered Person is entitled to take input credit only upon receipt of last lot or instalment. Registered person is deemed to have received the goods if supplier delivers to an agent, by way of transfer of document of title, before or during the movement of goods as directed by him.

5. Tax should actually be paid either in cash or through utilization of input credit

6. Other than supplies on which tax is payable on reverse charge basis, the recipient should pay the amount towards the value of supply of goods or services or both along with tax payable within 180 days from the date invoice issued by the supplier. If not the ITC availed shall become output tax liability of that recipient along with interest. Such output tax liability is eligible to be taken as credit by that recipient

7. If Depreciation is claimed on the tax component of cost of capital goods and plant and machinery for Income Tax purposes then ITC is not allowed on such tax component 8. Return should be furnished under section 39 in FORM GSTR 2

9. ITC in respect of invoice or debit note pertaining to F.Y.2017-18 is entitled for claiming only up to

  • Return filed U/S 39 for September 2018 (or)
  • Annual Return filed Whichever is Earlier

Apportionment of credit:

CASE A – ITC based on usage in business

Where the goods or services or both are used by the registered person partly for the purpose of any business and partly for other purposes, the amount of credit shall be restricted to so much of the input tax as is attributable to the purposes of his business.

CASE B – ITC based on use of Inputs

Where the goods or services or both are used by the registered person partly for effecting taxable supplies and partly for effecting exempt supplies, the amount of credit shall be restricted to so much of the input tax as is attributable to the said taxable supplies.

Apportionment of credit

CASE C -Banking & Finance

Banks /FIs including NBFCs, engaged in supplying services by way of accepting deposits, extending loans or advances shall either

  • i.) Follow CASE –
  • ii.) Furnish details in FORM GSTR – 2 and avail 50% of admissible ITC every month

Note: The option once exercised is same throughout that F.Y.

ITC on JOB Work:

Principal referred u/s 143 shall take ITC on Inputs/Capital Goods sent to job worker either Directly or through Principal’s Place of Business provided within TIME LIMITS the job worker supplies back to Principal’s Place of business else it is DEEMED AS SUPPLY of Input/ Capital goods in the hands of Principal.

Date of Deemed Supply:

  • When Inputs / capital goods sent directly to job worker date of deemed supply is the date when job worker receives such inputs and capital goods
  • If they are sent from principal’s place of business then the date of deemed supply is when inputs/capital goods are sent out from principal’s place of business

Conditions to Claim ITC on JOB work:

  • (1) The inputs, semi-finished goods or capital goods shall be sent to the job worker under the cover of a challan issued by the principal
  • (2) The challan issued by the principal to the job worker shall contain the details specified in rule Invoice.10
  • (3) The details of challan from a job worker shall be included in
  • (4) Where the inputs or capital goods are not returned to the principal within the time limits, the challan issued shall be deemed to be an invoice.

Recommended Articles