When can I claim Input Tax Credit under GST?

Author
By Sakshi Shah on February 18, 2019

Input Tax Credit is the credit of GST paid on the purchase of goods or services. It is utilised to pay GST on the sale of goods or services.

What is Input Tax Credit under GST?

The taxpayer can claim the Input tax credit of GST if he fulfils the following conditions:

  • The taxpayer has a valid tax invoice or any other tax paying document
  • He has received the goods or services
  • He has made payment of the value of goods or services including tax within 180 days from the date of issue of invoice
  • The supplier has paid the tax to the government
  • The supplier has filed his GST Returns
  • If he receives the inputs in lots, he can claim the credit only he receives the last lot of inputs

What is the time limit to claim Input Tax Credit under GST?

The taxpayer cannot claim Input credit for any tax invoice pertaining to a financial year after:

  • Filing the return for the month of September following the end of financial year to which such invoice pertains,
    OR
  • Filing of the Annual Return
    whichever is earlier
How to Claim Input Tax Credit?

When can I not claim Input Tax Credit under GST?

Input Tax Credit is ineligible and the taxpayer cannot claim it under the following situations:

  • Time limit to avail Input Tax Credit is over
  • The dealer has not applied for Registration within 30 days from the date of becoming liable to register
  • The recipient has not made payment of the value of goods or services including tax within 180 days from the date of issue of invoice
  • If the taxpayer uses goods or services for personal consumption and not for business purpose
  • If the taxpayer uses goods or services for providing exempt supplies
  • The goods are stolen, lost, destroyed or given away as a gift or free samples
  • On motor vehicles and other conveyances except in certain cases
  • Goods or services provided relating to:
    • Foods and beverages, outdoor catering, health services, beauty treatment services, cosmetic and plastic surgery.
    • Club memberships, health and fitness centre memberships
    • Rent-a-cab, life insurance, health insurance except when it is mandatory for an employer under any law
    • Travel benefits like leave travel concession provided to employees
  • Hotel Services – If the dealer’s state of registration is different than the state in which the hotel is located, he cannot claim ITC unless he is also registered in the other state.
In GST, can I take a credit for GST paid in hotels/restaurants for a client meeting? Claiming ITC in case of restaurant services and hotel services is different for every situation. Read more about it here.