Input Tax Credit (ITC) is available for Goods & Services Tax (GST) paid or payable by a registered person on the purchases or expenses incurred for the business activities.
Criteria To Claim Input Tax Credit (ITC)
- You must be a registered person, that’s taxable person.
- The goods or services must have been acquired in the course or furtherance of the business. ITC is claimable on acquisition of capital assets used in the business.
- Goods or services are acquired for making taxable supplies.
- You must hold a valid tax invoice.
- Tax invoices must be in the name of the registered person.
- No ITC shall be available on tax component of capital goods where depreciation is claimed on such tax component.
ITC Credit adjustments
- ITC towards IGST shall be utilised towards IGST, CGST & SGST in that order
- ITC towards CGST shall be used for CGST first and balance towards IGST
- ITC towards SGST shall be utilised towards SGST and balance towards IGST
- ITC towards CGST shall not be utilised for payment of SGST