All you should know about – Input Tax Credit under GST

What is ITC?

ITC – Input Tax Credit is the tax paid on inward supply of goods/services (e.g. purchases) that can be reduced when paying the Output liability.


Conditions for claiming ITC:

  • Payment shall be made within 180 days.**
  • Used for business purposes.
  • Actual possession of invoices/debit notes/credit notes/bill of supply etc.
  • Receipt of goods/services.
  • Tax has been actually paid by the supplier.
  • No ITC will be allowed if depreciation has been claimed on the tax component of capital goods

*If Inputs are received in lots – Can claim ITC only when the last lot is received.

**If not, ITC claimed will be added to the output liability along with interest. However, once the amount is paid, ITC can be re-claimed.


Time limit for claiming ITC?

  • Due date of furnishing of next year’s september’s return (to which such invoice pertains)


  • Furnishing of relevant annual return

Whichever is earlier.


When to avail and not to avail ITC under GST: