Eligibility and Conditions for taking Input tax credit under GST

Input Tax Credit is the tax that a manufacturer pays on a purchase of product/service from a registered dealer. While making sales, such input tax credit is set off against his output tax liability and balance liability of tax is to be paid to the government.

Eligibility

  1. One must be registered person under GST.
  2. Goods or services used or intended to be used in the course or furtherance of his business.

Conditions to be satisfied for taking ITC

  1. The dealer must have a tax invoice.
  2. Actual goods/services have been received.
  3. The tax charged by the supplier has been paid to the government.
  4. Returns have been filed by supplier.
  5. If goods are received in installments then input tax credit will be available upon the receipt of last installment.
  6. The payment should be made within 180 days from the date of issue of invoice.
  7. The dealer has not claimed depreciation on the tax component of the cost of capital goods under the provisions of the Income Tax Act, 1961.
  8. The dealer shall not be entitled to take input tax credit in respect of any invoice or debit note beyond the month of September of the following financial year to which such invoice pertains or the date of filing annual return, whichever is earlier.

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