Input tax credit under GST: conditions, blocked credits and time limits

Conditions to claim ITC

Under Section 16 of the CGST Act, you can claim ITC only if:

1. 1.You hold a valid tax invoice or debit note.
2. 2.The invoice appears in your GSTR-2B (the supplier has reported it in GSTR-1).
3. 3.You have received the goods or services.
4. 4.The supplier has actually paid the tax to the government.
5. 5.You have filed your GSTR-3B.
6. 6.You pay the supplier within 180 days of the invoice date; otherwise the credit is reversed until payment.

Blocked credits

Section 17(5) blocks ITC on certain items even if used for business, including:

• Motor vehicles for passenger transport (with exceptions)
• Food, beverages, outdoor catering, beauty treatment and health services (with exceptions)
• Club memberships and health and fitness centres
• Works contract and construction of immovable property (other than plant and machinery)
• Goods lost, stolen, destroyed or given as free samples or gifts
• Goods or services for personal consumption

Time limit

ITC for a financial year must be claimed by 30 November of the following year, or the date of filing the annual return, whichever is earlier.