Input Tax Credit is the heart of GST — the tax you paid on purchases reduces the tax you owe on sales. Claim it right and your effective tax cost drops sharply; claim it wrong and you face reversal with 24% interest.
The four conditions to claim ITC
- You have a valid tax invoice (or debit note) from a registered supplier.
- You actually received the goods or services.
- The supplier filed the invoice in their GSTR-1 — it must appear in your GSTR-2B.
- The supplier paid the tax to the government, and you pay the supplier within 180 days.
GSTR-2B matching is non-negotiable
Since the rules tightened, you can only claim ITC that appears in your auto-generated GSTR-2B statement. If your supplier didn't file or filed late, your credit is stuck — which is why choosing compliant suppliers is now a real financial decision.
Blocked credits — you can never claim ITC on these
- Motor vehicles for personal use (with limited exceptions like transport businesses)
- Food, beverages, catering, club and gym memberships
- Personal-use goods and services
- Works-contract services for constructing your own office building
- Goods lost, stolen, destroyed, written off, or given as free samples
Time limit
ITC for a financial year must be claimed by the 30th of November of the following year or before filing the annual return, whichever is earlier. Missed credits after that are gone permanently.
Track purchases with GST detail
BizGST Pro's expense tracking records the GST component of every purchase separately, so at filing time you know exactly how much ITC you're entitled to — no shoebox of bills.