Who can claim Input Tax Credit under GST?

Input Tax Credit is the credit of GST paid on the purchase of goods or services. The taxpayer can use it towards payment of GST on the sale of goods or services.  One can claim Input Tax Credit only if the goods and services received is used for business purposes

Input Tax Credit of GST paid on the inward supply of goods or services or both that the taxpayer uses or intends to use for the purpose of business. The following persons can claim ITC:

List of documents required to claim Input Tax Credit under GST?

Taxpayer registered under GST can claim Input Tax Credit by filing his GST Returns. He can avail ITC on the basis of the following documents:

  • Tax Invoice issued by the supplier
  • Debit Note issued by the supplier
  • Revised Invoice issued by the supplier
  • Bill of Entry issued in case of Import
  • Document issued by Input Service Distributor (ISD)
  • Tax Invoice issued by the recipient in case of reverse charge

Who cannot claim Input Tax Credit under GST?

The following persons cannot claim Input Tax Credit under GST:

  • Business not registered under GST
  • Business registered under the Composition Scheme are not allowed to claim the input tax credit on its purchases
  • The business registered under GST but not filing GSTR-3B cannot claim ITC

FAQs

What can be claimed as ITC?

ITC can be claimed for business purposes only. ITC will not be available for goods or services exclusively used for:
A. Personal use
B. Exempt supplies 
C. Supplies for which ITC is specifically not available

What are the Documents Required for Claiming ITC

To claim ITC following documents are required:
1. Invoice issued by the supplier of goods/services
2. The debit note issued by the supplier to the recipient (if any)
3. Bill of entry
4. An invoice issued under certain circumstances like the bill of supply issued instead of tax invoice if the amount is less than Rs 200 or in situations where the reverse charge is applicable as per GST law.
5. An invoice or credit note issued by the Input Service Distributor(ISD) as per the invoice rules under GST.
6. A bill of supply issued by the supplier of goods and services or both.

Is ITC available on Capital Goods?

ITC is available for capital goods under GST.
However, ITC is not available for:
1. Capital Goods used exclusively for making exempted goods
2. Capital Goods used exclusively for non-business purposes 
No ITC will be allowed if depreciation has been claimed on tax component of any capital goods.

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