Input Tax Credit
Easily setup a sole proprietorship with registrations, LEDGERS and business bank account.
Benefits
- Fewer legal formalities than LLP.
- Associated with the GST and income tax departments.
- Full control over the business for the sole proprietor.
- No separate business tax filings.
- Easy to disassemble.
Offers and discounts
Save 18% with GST Registration
Get GST e-invoice with Input Tax Credit
Get Whatsapp Support
Chat with Us for Hassle-Free Tax Solutions!
Get Free Consultation
Get Free Consultation Before Action: Call or Meet Us in Person!
Input Tax Credit Under GST, Here’s What to Focus on
Input Tax Credit (ITC) was introduced with the implementation of GST in 2017. It allows registered taxpayers to offset the GST paid on their purchases (inputs) against the GST collected on their sales (output tax). It is governed by the provisions of the Central Goods and Services Tax Act, 2017 (CGST Act), the State Goods and Services Tax Act, 2017 (SGST Act) and the Integrated Goods and Services Tax Act, 2017 (IGST Act).
What Is ITC Filing Process? 6 Easy Steps
If you have all the required documents, file an Input Tax Credit under GST as follows:
Step 1:
Visit the GST portal and click Services -> Returns -> ITC Forms.
Step 2:
Fill out the GST ITC-01 Form and click ‘Prepare Online’ to fill the ITC in GST portal.
Step 3:
Fill in the appropriate details and save your invoice. You may preview it in a PDF format, but it won’t be submitted until you click ‘Submit.’
Step 4:
Fill in the details of your Cost Accountant or Chartered Accountant if the value of the claimed ITC is more than Rs. 2 lakhs.
Step 5:
After filling in all the details, sign the form with your DSC or EVC and enter the OTP.
Step 6:
If you have carefully filled in all details, submit the form and you will see the filing status as ‘Filed.’
Details Required for Filing ITC in GST
- GSTIN
- Invoice Number
- Invoice Date
- Goods Type
- Description of inputs in stock
- Unit Quantity Code (UQC)
- The actual quantity of the inputs being claimed for ITC
- The invoice value of the purchase (as adjusted by debit note/ credit note)
- ITC Claimed (Central Tax)
- ITC Claimed (State/UT Tax)
- ITC Claimed (Integrated Tax)
- ITC Claimed (Cess)
Certificate Authority Details (Optional)
These fields are only required if the value of claimed ITC exceeds Rs. 2 lakhs.
- Name of the Firm issuing the certificate
- Name and Membership number of the certifying Chartered Accountant/Cost Accountant
- Date of issuance of the certificate
- Chartered Accountant or Cost Accountant certificate
Hassle-Free ITC Filing with a Tax Consultant You Can Trust
Documents for Filing GST Input Tax Credit
- Tax Invoices issued by the supplier
- Debit/Credit Notes issued by the supplier
- Delivery challan or goods receipt note
- Reverse Charge Invoices
- Import Documents (Bill of Entry and Import Declaration Form (IDF))
- Payment Proof
If you have all the required documents, proceed to fill out the GST Input Tax Credit.
Importance of GST Return Filing Process
- Filing an ITC tax liability by offsetting the GST paid on purchases (inputs) against the GST collected on sales (output).
- Improves the cash flow by reducing the amount of GST payable to the government.
- Ensures compliance if claimed timely and accurately.
- Unclaimed ITC can lead to blocked credits and potential losses if not utilized on time.
- ITC allows businesses to reinvest their funds in business growth.
Final Words
Final Words
In simple terms, filing Input Tax Credit under GST helps you claim credit on the taxes paid for the purchases. It can also compensate the GST on your sales. Besides the transfer of business, you may file an ITC on job work, capital goods and ISD. It exists to reduce the overall tax burden on businesses. However, ITC in GST is available only for registered businesses.
FAQs
What Is A Reversal Of Input Tax Credit?
Reversal of Input Tax Credit under GST refers to the process of adding back the input tax credit (previously claimed) to the output tax liability.
What Are the Reasons for Reversal of Input Tax Credit?
Input Tax Credit under GST can be reversed in the case of non-payment of supplier, non-business purposes, bl
What is the Eligibility Criteria for Claiming Input Tax Credit Under GST?
The eligibility criteria for claiming ITC in GST are GST registration, GST invoice, confirmation from the recipient of goods, GST return filings and payment of due GST. Moreover, ITC should be claimed in the given time frame.
What Is ITC Reconciliation?
ITC reconciliation means matching the input tax credit (ITC) claimed by a taxpayer with the details provided by their suppliers in their respective GST returns. It involves comparing information in the taxpayer’s purchase records with the data reflected in their GSTR-2A form.
Who Cannot Claim GST Input Tax Credit?
Unregistered persons, composition dealers and non-resident taxpayers cannot claim GST Input Tax Credit. Similarly, it cannot be claimed for goods and services for personal use, exempted supplies, motor vehicles, work contracts, food, beverages, entertainment, capital goods and non-payment of GST.
