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Document and Forms for Claiming ITC under GST

Updated on :  

08 min read.

We had shared an article earlier on basics of input tax credit (ITC) and how to claim. In this article, we would be sharing the particular forms and documents required as released by the Indian Government in the latest draft of GST law.

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Latest Update

17th December 2022
The following are recommendations from the 48th GST Council meeting-
(1) CGST Rule 37(1) is going to be amended retrospectively from 1st October 2022 for reversing ITC as per the second proviso to Section 16 of CGST Act, only to the extent of the invoice value not paid to the supplier versus the value of the supply, along with tax payable.
(2) GST Council will insert Rule 37A in CGST Rules that will define steps to reverse ITC claimed on taxes not deposited by the supplier within a specified date. Further, the process of re-availing such ITC where the supplier pays it subsequently will be provided in compliance with Section 16(2)(c) of the CGST Act.
(3) Procedure will be given to verify ITC differences between GSTR-3B and GSTR-2A for FY 2017-18 and 2018-19. It would reduce the need for litigations and give much-needed clarity to taxpayers and officers.
(4) ITC will be available for the scenario stated in Section 12(8) of the IGST Act – the place of supply is a foreign country, but the GST-registered recipient is in India, in cases of goods transportation/courier/mail services.

Document and forms for claiming ITC under GST

Following documents would be required by each applicant who wants to claim ITC under GST:

  • An invoice issued by the supplier for the supply of goods and services or both as per the GST law.
  • The eligible ITC must appear in the GSTR-2B of the recipient or buyer.
  • The debit note issued by the supplier to the recipient in case of taxable value or tax payable mentioned in the invoice is less than the taxable value or tax payable on such supply of goods and services or both.
  • Bill of entry
  • 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.
  • An invoice or credit note to be issued by the Input Service Distributor(ISD) as per the invoice rules under GST.
  • A bill of supply issued by the supplier of goods and services or both as per the invoice rules under GST

All the above applicable documents prepared as per the invoice rules under GST are to furnished at the time of filing form GSTR-2. ITC cannot be claimed on the tax paid on goods and services or both due to an order for the demand raised due to any fraud, willful misstatement or suppression of facts.

ITC claim by Banking company or Financial institution

According to the GST rules, an applicant claiming ITC on such goods and services or both which are used partly for taxable supplies (including 0 rated goods) and exempted supplies will be allowed to claim ITC for only the taxable supplies (including 0 rated goods). Banking companies or financial institutions have an option for claiming the ITC on the deposits and loans or advances to comply with above rules or claim the 50% of the total ITC available in each month and the rest will lapse. Details for claiming the 50% ITC have to be filled out in form GSTR-2. For example:

Bank of Baroda has total ITC of Rs 5 crore out of which 2 crores of ITC for the taxable supplies including zero-rated goods. Bank of Baroda should opt for the 50% ITC claim as it is more beneficial than getting the ITC only for Rs 2 crore.

Steps for claiming ITC in special circumstances

In the following circumstances, certain different steps are to be followed for claiming the ITC:

  • An applicant switching from the composition scheme to a normal taxpayer under GST can claim ITC on the input held in stock, capital goods, semi-finished and finished goods in stock as on the day preceding the day on which he becomes liable to pay tax as a normal taxpayer.
  • When an exempt goods or service becomes a taxable supply then the applicant can claim ITC on the input in stock, capital goods, semi-finished or finished goods used for such supply.

*ITC on Capital goods has to be reduced by 5% per quarter or a part thereof from the date of invoice or other document specifying when capital goods were received by the taxable person. For example:

Ajay was registered in the composition scheme and made the switch to being a normal taxpayer.He was liable to pay tax as a normal taxpayer from 20 September 2017. Ajay can claim ITC on inputs up to 19 September 2017.

Registered person under above circumstances has to file form GST ITC-01on the common portal within 15 days of becoming eligible to claim ITC. Details provided in form GST ITC-01 have to be duly certified by a chartered accountant or cost accountant if the aggregate ITC of CGST, SGST and IGST exceeds Rs 2 lakh.

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