Input tax credit is a critical component of compliance under GST. While input tax credit is available on all inputs used in the course of business or for furtherance of business, certain conditions have been laid down for claiming the input credit.
Also, input tax credit is not allowed on certain inputs. This checklist is a useful ready reckoner for you to claim input tax credit correctly.
| Conditions for claiming input tax credit | Negative list (Goods or services on which input tax credit cannot be claimed) | ||
| ✔ | The inputs should be used or intended to be used in the course of business or for the furtherance of the business | ✔ | Motor vehicles or other conveyance, unless they have been further supplied or used for transporting passengers or goods or used for imparting training on driving, flying or navigating the vehicles |
| ✔ | You should have a tax invoice/debit note for the inward supply, issued by a registered person | ✔ | Food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, unless they have been used for making outward supply of the same category of goods or services |
| ✔ | You have received the goods or services | ✔ | Membership of clubs and health & fitness centres |
| ✔ | The supplier has paid the tax to the Government | ✔ | Rent-a-cab services, life & health insurance taken for employees, unless these services have been notified as obligatory for an employer to provide to its employees or they have been used for making outward supply of the same category of goods or services |
| ✔ | You have furnished Form GSTR-3 for the month | ✔ | Travel benefits to employees on vacation, such as leave or home travel concession |
| ✔ | If goods are received in lots or instalments, input credit can be taken only upon receipt of the last lot or instalment | ✔ | Works contract services used for construction of an immovable property (other than plant & machinery), except where the services have been used for further supply of works contract service |
| ✔ | Inputs have been used for making taxable supplies, not exempt supplies | ✔ | Goods or services received for construction of an immovable property (other than plant & machinery) |
| ✔ |
Input credit is being availed before the date of filing of return for September of the next financial year or the date of filing of annual return, whichever is earlier |
✔ | Goods lost, stolen, destroyed, written off or disposed as gift or free samples |
| ✔ |
Verify that the supplier has reported the invoice correctly and that it is reflected in GSTR-2B. |
| ✔ |
Follow up on supplier compliance wherever invoices are pending, or discrepancies are identified, as supplier tax payment is a mandatory condition for availing ITC under Section 16(2)(c). |
You can download this checklist (PDF file) and start using it right away! Download
