With the introduction of GST in India, an important feature came into existence, i.e., the GST Input Tax Credit. The taxpayers can enjoy the benefit of the input tax credit in the GSTR-3B return from February 2020 to August 2020.

GSTR-3B is a monthly self-declaration that needs to be filed by a registered person along with GSTR 1 and GSTR 2 forms.

What is GST Input Tax Credit?

GST Input Tax Credit or ITC means the reduction of tax that has already been paid on inputs and the payment of the balance amount.

When a consumer buys a product/service from a registered dealer, taxes have to be paid on the purchases made. The tax is collected on sales. The taxes paid at the time of purchase are adjusted with the output tax and the balance has to be paid to the Central Government. This is the utilization of input tax.

Who can claim GST Input Tax Credit?

A person or business entity registered under GST can claim Input Tax Credit if the following conditions are fulfilled:

a. The dealer should have a tax invoice.

b. The prescribed goods/services have been received.  

c. All returns have been filed.

d. The supplier has paid the tax to the government.

e. When goods are received in installments ITC can be claimed only when the last supply is received.

f. No ITC granted if depreciation is claimed on the tax component of a capital good.

g. Composition scheme holder cannot claim ITC.

What can be claimed as the GST Input Tax Credit?

Only a business entity can claim ITC. ITC is not applicable for goods or services if they are for:

• Personal Use
• Exempt Supplies
• Supplies for which ITC is not available

How can one claim GST Input Tax Credit?

All regular business holders or taxpayers need to report the amount of ITC in their monthly GST returns of Form GSTR-3B, in Table 4. The summary of eligible ITC amount, ineligible ITC amount, and reversed ITC has to be mentioned.

How can we help you?

We make things simpler for you at Online Legal India™. Starting with GST registration, GST returns filing to GST modification, we provide all kinds of services from the end of GST experts at very nominal charges and with quality service.

Added services like Company registration, FSSAI Food License registration, and Trademark registration and legal advice on any issue are also available on our platform.