Claim the input tax credit you are entitled to, and avoid the ITC you are not, with Legal Startup. A dedicated GST expert reconciles your books with GSTR-2B, checks eligibility and blocked credit, computes reversals and supports you on mismatch notices and refunds.
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Input tax credit (ITC) is the GST paid on business purchases that a registered person can set off against output GST under Section 16 of the CGST Act, 2017, provided the prescribed conditions are met.
Last updated: October 2026. GST provisions, time limits and portal procedures can change, so we confirm the current position before you proceed.
When you buy goods or services for your business, the supplier charges GST. When you sell, you charge GST to your customer. Input tax credit lets you subtract the GST you paid on purchases from the GST you owe on sales, so you pay tax only on the value you add.
ITC is not automatic. It depends on conditions such as having a valid tax invoice, actually receiving the goods or services, the supplier reporting the invoice and paying the tax, and the credit appearing in your GSTR-2B. Some purchases are blocked from credit altogether, and some credit must be reversed later.
For official information and filing, visit the GST portal (gst.gov.in) and the CBIC GST website (cbic-gst.gov.in).
Every purchase falls into one of these buckets.
Credit you can claim.
Credit not allowed by law.
Credit to be paid back.
Accumulated credit returned.
Not sure whether a particular purchase qualifies? Share your invoice details and our experts will advise free of charge.
Accurate credit lowers your tax cost and your notice risk.
Valid credit offsets output tax, reducing the cash you pay each month.
Claiming only what matches GSTR-2B reduces department queries.
Tracking the claim deadline prevents eligible credit from lapsing.
Regular follow-up pushes suppliers to report invoices on time.
Books, GSTR-3B and the annual return tell the same story.
Documented reconciliations make scrutiny and audit easier to handle.
From data collection to a clean claim.
Timelines depend on invoice volume and record quality. Not to scale.
We confirm the months or financial year to review and the GSTINs involved.
You share the purchase register and ledgers, and we use GSTR-2B and your filed GSTR-3B for the period.
We match invoice by invoice and list what is missing, extra or different in amount or tax.
We separate eligible, blocked and reversible credit and compute any reversal and interest.
After your approval, the credit is claimed and any reversal reported in the relevant GSTR-3B tables.
We list unreported invoices for vendor follow-up and track the claim deadline for them.
Keep these ready to avoid delays. Our expert will confirm the exact list for your case.
The cost has separate parts, and we show them separately so there are no surprises:
Our fee depends on the number of invoices, the period reviewed and the complexity. Call free for a custom quote before you pay anything.
Any tax, interest or late fee arising from reversals or late claims is payable to the government and is separate from our fee.
Notice replies, refund applications and bookkeeping clean-up are quoted only if you need them.
We share a clear, itemised quote before you begin. Get your free quote →
Choose the situation that matches your business, or call free for a custom quote.
Businesses wanting books matched with GSTR-2B.
Businesses with blocked credit, mixed supplies or audit needs.
ITC mismatch notice, scrutiny, or accumulated credit to refund.
Our professional fee is quoted after a free call. Government dues are separate. We do not promise outcomes with the tax authorities. Not sure which option fits? Ask for a free consultation.
A quick view of common ITC situations.
| Situation | ITC position | Condition | Reference | What to do |
|---|---|---|---|---|
| Business purchase, invoice in GSTR-2B | Generally allowed | All Section 16 conditions met | Section 16 | Claim in GSTR-3B |
| Invoice not in GSTR-2B | Not allowed for now | Supplier has not reported it | Section 16(2)(aa) | Follow up with supplier |
| Blocked goods or services | Not allowed | Falls under the blocked list | Section 17(5) | Do not claim |
| Supplier unpaid beyond 180 days | Reverse with interest | No payment within 180 days | Rule 37 | Reverse, re-claim on payment |
Most notices come from claiming credit that does not match GSTR-2B.
Claiming credit is not the end of the process.
Retain invoices, workings and vendor confirmations in case of scrutiny or audit.
IGST, CGST and SGST credits are set off in a prescribed order, and CGST and SGST cannot be cross-utilised.
For higher monthly taxable turnover, a portion of output tax may have to be paid in cash under Rule 86B, with exceptions.
ITC claimed in the year should reconcile with GSTR-9 and your books.
Credit on the previous financial year's invoices must generally be claimed before the cut-off date.
Quick answers on input tax credit under GST.
Input tax credit is the GST a registered business has paid on purchases of goods and services used for business, which it can set off against the GST it collects on sales. It is governed by Section 16 of the CGST Act, 2017, and it avoids tax being charged on tax at each stage of the supply chain.
You must be a registered person, hold a valid tax invoice or other prescribed document, have received the goods or services, and the supplier must have paid the tax and the invoice must appear in your GSTR-2B. You must also file your return, and claim within the time limit.
Generally no. Credit can be availed only on invoices that are reflected in your GSTR-2B, which depends on the supplier reporting them in GSTR-1 or the IFF. If an invoice is missing, follow up with the supplier and claim the credit in the period it appears, within the time limit.
Credit on an invoice or debit note can generally be claimed up to 30 November following the end of the financial year to which it relates, so for FY 2025-26 invoices the date is 30 November 2026 unless extended. We confirm the current position before you rely on it.
Blocked credit includes items such as motor vehicles for most uses, food and beverages, outdoor catering, club memberships, beauty treatment, certain health and travel services, personal consumption, and goods lost, stolen or given as gifts or free samples. There are limited exceptions, so each case needs checking.
ITC reversal means paying back credit already claimed. It is required in cases such as use of inputs for exempt supplies, personal use, blocked items, non-payment to the supplier within 180 days, and goods lost or destroyed. Reversal is generally reported in GSTR-3B and may carry interest.
If you do not pay the supplier the invoice value and tax within 180 days from the invoice date, you must reverse the credit with interest. You can claim it again once you make the payment, subject to the time limit. The rule does not apply to tax paid under reverse charge.
IGST credit is used first against IGST and then against CGST and SGST. CGST credit is used against CGST and then IGST, and SGST credit against SGST and then IGST. CGST credit cannot be used for SGST, and SGST credit cannot be used for CGST.
Yes, in general. Credit on tax paid under reverse charge can be claimed after the tax is paid in cash, and IGST paid on imports of goods can be claimed against the bill of entry. The usual conditions and blocked credit rules still apply, and we check each case.
Refund of accumulated credit is generally available in specific cases, mainly exports without payment of tax and inverted duty structure where tax on inputs is higher than on outputs, under Section 54. Refund needs an application with supporting documents, and the department decides it.
Need help with input tax credit reconciliation, reversal or a notice? Speak to our GST expert today – the consultation and the quote are free.
Tell us what you need and our team will get back to you with the right guidance.
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