ITC-02 Filing on the GST Portal: A Guide

As GST taxpayers, it is important to stay compliant with the various rules and regulations set by the government. One such compliance requirement is filing ITC-02 forms on the GST portal. In this guide, we will walk you through the process of ITC-02 filing on the GST portal, covering everything from understanding the form to the step-by-step process of filing it.

Understanding ITC and ITC-02

Before we dive into the specifics of ITC-02 filing on the GST portal, let's take a step back and understand the concept of Input Tax Credit (ITC) and its significance. ITC is the credit a business can claim on the GST paid for goods or services it has received. Essentially, it helps to offset the GST paid by a business on its inputs (goods or services used in the course of business) against the GST collected on its outputs (goods or services sold by the business).

The claim of ITC is made through filing various forms on the GST portal, one of which is ITC-02. ITC-02 is used to claim ITC on goods or services received by a business that has been dispatched to another location for job work or further supply from the supplier's place of business. In other words, if a business has received goods or services from another business that have been dispatched to another location for job work or further supply, the receiving business can file ITC-02 to claim ITC on those goods or services.

Required Information and Documentation

Before you can file ITC-02 on the GST portal, there are certain pieces of information and documentation that you'll need to gather. These include:

1. GSTIN (Goods and Services Tax Identification Number) of the supplier

2. Invoice or bill of supply number and date

3. Details of the goods or services received, including the HSN (Harmonized System of Nomenclature) code and the value of the goods or services.

4. GST paid on the goods or services received

5. Place of business of the supplier and the place of business to which the goods or services were dispatched

6. Challan details, if the goods or services were received against a challan

7. Any other relevant supporting documents

It's important to ensure that all of the information and documentation you provide is accurate and complete, as any discrepancies could result in the rejection of your ITC-02 claim.

Who Needs to File ITC-02?

GST taxpayers who have received goods or services and wish to claim ITC must file the ITC-02 form. Additionally, GST taxpayers who have claimed ITC on goods or services in their GSTR-2A (GST Return 2A) and wish to reverse that claim must also file the ITC-02 form.

When to File ITC-02?

The due date for filing ITC-02 is the last date of the month following the month in which the goods or services were received. For example, if you received goods or services in June, the due date for filing ITC-02 would be July 31st.

How to file ITC-02?

Form GST ITC-02 submission requires the following prerequisites:

1. Both the transferor and the transferee of the business must be legally registered for GST.

2. ITC should be accessible to the transferor in the electronic credit ledger.

3. The transferor is responsible for submitting all necessary GST returns from earlier years.

4. The merger's pending transactions should all be approved, rejected, or amended. Additionally, all debts owed by the transferor for earlier returns must be settled.

5. When selling a business, it is important to accurately plan for transferring liabilities due to stayed tax demands, litigation, recovery, etc. A cost accountant or a chartered accountant should certify the same.

There are two steps in the process of transferring unused ITC:

1. The transferor submits GST ITC-02 with the ITC that was not used.

2. On the GST portal, the transferee either accepts or rejects the same.

The transferor must take the steps listed below to file ITC-02:

1. Log in to the GST portal using your login credentials.

2. Go to the "Services" menu and select "Returns", and then choose "ITC-02."

3. Fill in the relevant information in the form, including details of the goods or services received, the GST paid on them, and the GST payable on your outputs.

4. Update the following information for the cost accountant or chartered accountant certification:

   • The certifying company's name

   • Name of the Cost Accountant or Chartered Accountant who is certifying

   • The number assigned to members of the certifying body

   • Date the certificate was issued

   • Click "Save" after adding a copy of the certificate.

5. Upload any supporting documents, if required.

6. Proceed to file using either EVC or DSC. Select the authorised signatory from the drop-down list and check the declaration checkbox. Use the DSC or EVC option to submit the form, as shown below:

7. Preview and verify the form before submitting it.

8. Once you have submitted the form, you will receive an acknowledgement number. Keep this number safe for future reference.

What should be done following the filing of Form ITC-02?

The transferee can accept or reject the transfer after the transferor files Form GST ITC-02. He should take the steps listed below:

1. After logging in, go to Services > User Services > ITC-02 on the GST portal. 

2. Select the ARN. It will display the information filed.

3. The transferee has the option to accept or reject the transfer.

4. A confirmation message will appear if the transferee selects "Accept." The transferee can proceed to file with DSC or EVC by clicking the declaration checkbox, choosing the authorised signature, and then clicking the file button.

A notification will appear to indicate a successful transfer. The transferee can verify that the status has changed to "Accepted" by visiting the ITC-02 pending action screen.