On the date of obtaining the GST registration, persons carrying on regular business would be holding stock of inputs, capital goods and finished goods at their place of business.
The GST paid on such goods purchased cannot be claimed as Input Tax Credit (ITC) before the date of obtaining GST registration. Only after obtaining the GST registration, taxpayers can avail input tax credit of GST paid on such inputs, capital goods and inputs in finished goods lying in stock, from the effective date of obtaining registration.
Form GST – ITC 01 is a declaration form filed on GST portal for claiming the input tax credit by taxpayers newly registered under GST. Filing of this form is mandatory to claim ITC on such stock.
Cases when ITC-01 must be filed
The declaration form in ITC – 01 is required to be filed in the following cases:
- When an application for GST registration is made within 30 days of becoming liable to pay GST. [Section 18(1)(a)]
- When any person opts for voluntary registration. [Section 18(1)(b)]
- When any person opts out of composition scheme but continues to be registered as a regular taxpayer. [Section 18(1)(c)]
- When an exempt supply of goods/services becomes taxable supply. [Section 18(1)(d)]
It should be noted that ITC cannot be claimed if the person fails to file Form ITC – 01.
Types of input tax credit allowed
- Input tax credit in respect of inputs held in stock on the cut-off date.
- Input tax credit in respect of inputs contained in semi-finished goods on the cut-off date.
- Input tax credit in respect of inputs contained in finished goods on the cut-off date.
- Input tax credit in respect of capital goods on the cut-off date.
Applies only in cases where a composition dealer opts out of the composition scheme and where exempted supply becomes taxable supply.
Cut-off dates for claiming of ITC and the timelines
Form ITC – 01 is required to be filed within 30 days of the person become eligible to claim ITC i.e. 30 days from grant of registration or opting out of composition scheme.
|Case||Cut-off date||No of times ITC can be claimed by filing ITC 01|
|When the application for GST registration is made within 30 days of becoming liable to pay tax [Section 18(1)(a)]||Date immediately preceding the date when he becomes liable to pay tax.||Once|
|When any person who opts for voluntary registration [Section 18(1)(b)]||Date immediately preceding grant of registration||Once|
|When any person opts out of composition scheme but continues to be registered and pay tax as a regular taxpayer [Section 18(1)(c)]||Date immediately preceding day when he opts to pay tax under regular mode.||Once in a year|
|When an exempt supply of goods/services becomes taxable supply [Section 18(1)(d)]||Date immediately preceding the date when the supply becomes a taxable supply||Once in month|
For example, Mr A, a trader opts for voluntary registration on 29 December 2018. Mr A would be eligible to claim ITC of inputs held in stock, inputs in semi-finished goods and finished goods lying in stock and capital goods with him as on 28 December 2018.
Points to remember while filing ITC 01
- Know what input tax credits can be claimed. For example, the ITC in respect of services cannot be claimed in Form ITC 01. ITC in respect of capital goods can only be claimed in case composition dealer opts out of composition scheme and where exempted supply becomes taxable supply.
- Invoice wise Details of ITC on purchases as on the cut-off date should be available.
- Form ITC 01 should be filed within 30 days of the date of registration/migration to a regular scheme.
- Invoices up to one year old can be claimed in case of inputs and up to five years in case of capital goods.
- If the ITC claim is more than INR 2 lakhs, Chartered Accountant certificate or Cost Accountant certificate must be uploaded.
Step by Step process to file Form ITC – 01
Step-1: Login to GST portal.
Step-2: Click on Services tab > Returns > ITC forms > ITC 01.
Click ‘Prepare online’ or ‘Prepare offline’ button.
Step-3: Select the type of ITC Claim and Fill in the Details
Select the clause and sub-clause of Section 18 under which claim is made in ‘Claim made under’ tab. The fields remain the same in each of the options mentioned above.
Proceed to file the necessary details invoice-wise as given below:
- Select the type of goods. (The option available under this field are – (i) Inputs held in stock, (ii) Inputs contained in semi-finished goods or finished goods, (iii) Capital goods. Thus, it is necessary for the taxpayers filing Form ITC – 01 to maintain a detailed stock register with records of procurement and consumption of inputs.)
- Enter GSTIN of supplier
- Enter invoice number and date (This date must be prior to the grant of approval for registration and not more than one year in case of inputs and five years in case of capital goods)
- Select Unit Quantity Code
- Description of goods -Inputs
- Enter quantity
- Enter invoice value (The amount of invoice value should be reported after adjusting the value of debit/credit notes issued against the relevant invoice)
- Enter ITC amount (CGST and SGST or IGST)
Note: For claims made under Sec. 18(1)(d), a date on which goods become taxable must also be entered.
Click on ‘Add’ button to continue adding more invoices or Click on ‘Save button’ to proceed to submit.
Step-4: After entering all invoices, click ‘Preview’ > ‘Submit’ > ‘Proceed’
Note that no modification is allowed after status turns submitted or you click on Proceed.
Step-5: Upload CA certificate, if applicable.
For claims of more than INR 2 lakhs, the details of Chartered Accountant or Cost Accountant need to be updated along with the certificate. The following details must be entered:
- Name of Firm
- Name of CA certifying the form
- Membership number
- Upload certificate (in JPEG format up to 500 KB)
- Date of issuance of the certificate.
Step-6: File the form using DSC or EVC
Once the form is successfully submitted, Click on ‘File using DSC’ or File using EVC’ button and select the authorized signatory from the drop-down list to file using DSC or EVC.
Once filed, ARN is generated and sent to the taxpayer via SMS or Email. The status of GST ITC 01 is changed to ‘Filed’.
The ITC claimed in Form ITC 01 is then made available in the electronic credit ledger.