Document and Forms for Claiming ITC Under GST

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    Input Tax Credit

    Under GST, the concept of an input tax credit is not new. It is equivalent to refusing under the current taxation system, but GST’s rules are entirely different. Input credit allows you to deduct the tax you already paid on inputs when you pay the output tax.

    Documents For Claiming ITC Under GST

    Every applicant who wants to claim an ITC under GST must provide the following documents:

    • An invoice issued by the supplier in accordance with the GST law for the supply of goods and services, or both.
    • Suppose the taxable value or tax due specified in the invoice is less than the taxable value of tax payable on such supply of goods and services or both. In that case, the applicable ITC must be included in the recipient’s GSTR-2B.
    • Bill of Entry
    • An invoice that is issued under specific conditions, such as when a tax invoice would not be appropriate because the amount is less than Rs. 200 or when the GST law’s reverse charge is in effect.
    • According to the GST invoice requirements, an invoice or credit note must be issued by the input service distributor (ISD).
    • A bill of supply that is issued by the provider of goods and services, or both, in accordance with the GST invoicing regulations.

    When submitting form GSTR-2, the above relevant documents must be provided. They were all prepared in accordance with the GST invoicing rules. Due to the order for the demand raised due to fraud, intentional falsification, or suppression of facts, ITC cannot be claimed on the tax paid on goods or services or both.

    ITC Claim By a Banking Company or Financial Institution

    The GST regulations state that a person requesting ITC on such goods and services or both that are utilised in part for taxable supplies (including 0-rated products) and exempted supplies shall be permitted to request ITC for only taxable supplies (including 0-rated goods).

    Banking firms and other financial institutions can claim the ITC on deposits, loans, and advances per the aforementioned regulations, or they can claim only half of the monthly ITC allotment, with the remaining 50% expiring after that. Form GSTR-2 must be filled out in full with the necessary information to claim the 50% ITC.

    Steps For Claiming ITC In Special Circumstances

    In the following circumstances, certain different steps are to be followed for claiming or claiming the ITC:

    • The day before the day on which he becomes liable to pay tax as a normal taxpayer, an applicant transitioning from the composition scheme to a normal taxpayer under GST may claim ITC on the input held in stock, capital goods, semi-finished and finished goods in stock.
    • When an exempt product or service becomes a taxable supply, the applicant may claim ITC on the input in stock, capital goods, and semi-finished or finished products used for such supply.

    From the invoice date or other documentation indicating when the taxable person got the capital goods, the ITC on those items must be decreased by 5% per quarter or a part thereof.

    A registered person must submit form GST ITC-01 on the common portal within 15 days of becoming eligible to claim ITC under the conditions above. If the total ITC for CGST, SGST, and IGST exceeds Rs. 2 Lakh, the information supplied in form GST ITC -01 must be duly attested by a chartered accountant or a cost accountant.

    Conclusion

    ITC allows a taxpayer to deduct the tax paid on inputs when paying the output tax. To claim ITC under GST, the following documents must be provided: supplier’s invoice, bill of entry, credit note issued by the input service distributor (ISD), bill of supply issued by the supplier of goods or services. ITC cannot be claimed on tax paid due to fraud, intentional falsification, or suppression of facts.

    Banking companies and financial institutions can claim ITC on deposits, loans, and advances for taxable supplies (including 0-rated products), or 50% of monthly ITC allotment if used for taxable and exempt supplies. In special circumstances such as transitioning from the composition scheme, becoming liable to pay tax as a normal taxpayer, or when an exempt product or service becomes taxable, certain steps need to be followed to claim ITC.

    The ITC on capital goods needs to be decreased by 5% per quarter or part thereof, from the invoice date or documentation indicating when the taxable person got the capital goods. A registered person must submit Form GST ITC-01 within 15 days of becoming eligible to claim ITC, and if the total ITC exceeds Rs. 2 lakh, the information must be duly attested by a chartered accountant or cost accountant.

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