GST Practical Guide: Input Tax Credit

[vc_row][vc_column][vc_column_text]`[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_message]This GST Series focusses on practical aspects of GST Implementation. The focus is not on explaining GST concepts but to provide quick, short & concise answers to many day to day implementation queries in a easy to understand manner. To make the articles simple to understand, we may omit certain complex scenarios which may not effect most of the businesses.[/vc_message][/vc_column][/vc_row][vc_row][vc_column][vc_column_text][toc]

What is GST Input Tax Credit

At the time of purchase of any goods or services you are required to pay GST. You can offset this GST against any GST payable by you on sale of Goods or Services. This offset of Input GST is know as Input Tax Credit

Who can avail GST Input Tax Credit

GST Input Tax Credit can be availed by a registered GST Full Dealer (GST Input Tax Credit is not allowed to composition dealer)

Conditions to avail GST Input Tax Credit

The following conditions must be fulfilled to take input tax credit:

  • You should have tax invoice or debit note issued by registered dealer
  • You should have received Good or Services
  • The Tax should actually have been received by the Government either in form of payment or in form of adjustment of tax credit
  • You should have filed GST Return
  • The Goods or Services should have been used for the purpose of business

Time period to claim GST Credit

All GST Input Tax Credit for any Financial Year i.e. for year ended on 31st March have to be claimed before  due date of filing of return for the month of September or filing of Annual Return whichever is earlier.

Goods or Services on which GST Input Tax Credit is not available

GST Input Tax Credit is not allowed on the following:

  • Input Tax Credit where the dealer deals in supply of fully or partially exempted Goods or Services.
  • Motor Vehicles except when its used for transportation business or in the business of selling of such motor vehicles or training of such motor vehicles
  • food & beverages
  • outdoor catering
  • beauty treatment
  • health services
  • cosmetic & plastic surgery
  • memership of club, health and fitness cente
  • rent a cab, health insurance and fitness center (except where they are obligatory under any law)
  • travel benefit to employees on vacation like Leave Travel allowance (LTC)
  • work contract services for construction of real estate
  • tax paid to composition dealer
  • gst on tax paid by non-resident taxable person except gst on goods imported by him
  • goods and/or services used for personal consumption
  • goods lost, stolen, destroyed, written off, gift or free samples

In the above, in most cases if such goods and/or services are used to provide taxable services, GST Input Tax Credit is allowed.



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