What conditions must I meet to claim input tax credit under GST?

The conditions (section 16)

1. A valid document: a tax invoice or debit note with the required details, including your GSTIN.
2. Receipt: you have received the goods or services, including goods delivered to someone else on your instructions.
3. Shown in GSTR-2B: the invoice appears in your GSTR-2B for the period (section 16(2)(aa)). Since October 2024 this depends on how you act on each invoice in the Invoice Management System: accept, reject or keep pending.
4. Tax paid by the supplier: the supplier has paid the tax to the government (rule 37A reverses credit where the supplier has not filed GSTR-3B).
5. Your own return: you have filed GSTR-3B.
6. Payment to the supplier within 180 days of the invoice date. If not, reverse the credit with interest; it can be claimed again once you pay (rule 37).

Time limit (section 16(4))

Claim the credit by 30 November following the end of the financial year of the invoice, or the date you file the annual return, whichever is earlier. Credit for FY 2025-26 must be claimed by 30 November 2026.

Credit that is never allowed (section 17(5))

Examples: motor vehicles for carrying up to 13 people (except for specified uses such as further supply, transporting passengers or training), food and beverages, outdoor catering, beauty treatment, health services, club memberships, travel benefits for employees, construction of immovable property (other than plant and machinery) on your own account, goods lost, stolen or given as gifts, and tax paid under the composition scheme.

Credit that must be reversed

• Credit used for exempt supplies or non-business purposes, in proportion (rules 42 and 43).
• Credit where you did not pay the supplier within 180 days.
• Credit claimed wrongly. If it was also used, interest is 18% a year (section 50(3)) and a penalty may apply.

Good practice

Reconcile your purchase register with GSTR-2B every month before filing GSTR-3B, follow up with suppliers whose invoices are missing, and keep the reconciliation as a working paper. Our guide to ITC and GSTR-2B sets out the routine, and the credit utilisation calculator shows the cash payable after credit.