How To File ITC-02 on The GST Portal?
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.
ITC is claimed by filing several 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 was dispatched to another location for job work or further supply from the supplier’s place of business. To put it in other words, if a business has obtained goods or services from another business that were sent to another location for job work or further supply, the recipient business can utilise the ITC-02 form to request Input Tax Credit (ITC) for those goods or services.
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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.
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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:
- Both the transferor and the transferee of the business must be legally registered for GST.
- ITC should be accessible to the transferor in the electronic credit ledger.
- The transferor is responsible for submitting all necessary GST returns from earlier years.
- 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.
- 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.
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There are two steps in the process of transferring unused ITC:
- The transferor submits GST ITC-02 with the ITC that was not used.
- On the GST portal, the transferee either accepts or rejects the same.
The transferor must take the steps listed below to file ITC-02:
- Log in to the GST portal using your login credentials.
- Go to the “Services” menu and select “Returns”, and then choose “ITC-02.”
- 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.
- 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.
- Upload any supporting documents, if required.
- 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:
- Preview and verify the form before submitting it.
- Once you have submitted the form, you will receive an acknowledgement number. Keep this number safe for future reference.
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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:
- After logging in, go to Services > User Services > ITC-02 on the GST portal.
- Select the ARN. It will display the information filed.
- The transferee has the option to accept or reject the transfer.
- 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.
Conclusion
Filing ITC-02 on the GST portal is a straightforward process that allows businesses to claim ITC on goods or services that were sent to another location for job work or further supply. This form is an important tool for businesses to optimise their Input Tax Credit (ITC) utilisation and financial operations.
Hi there! I’m a Chartered Accountant with over 20 years of experience in financial accounting and a passion for writing. I enjoy simplifying complex topics like GST and income tax, believing that learning should be a lifelong journey. I'm here to share insights and make financial matters easier for everyone!
Frequently Asked Questions
- What is ITC-02 under GST?ITC-02 is a form filed to transfer unutilized Input Tax Credit (ITC) from one GST registration to another during business transfers, mergers, or demergers.
- When is filing ITC-02 mandatory?Filing ITC-02 is mandatory when a business transfers assets or liabilities due to mergers, demergers, or sales.
- Who is eligible to file ITC-02?Entities transferring unutilized ITC during mergers, demergers, or sales of business units are eligible to file ITC-02.
- What documents are required to file ITC-02?Required documents include a transfer agreement, ITC ledger details, and a certificate from a Chartered Accountant or Cost Accountant.
- Can ITC-02 be filed online on the GST portal?Yes, ITC-02 can be filed online through the GST portal by logging into the taxpayer account and providing necessary details.
- Is there a time limit to file ITC-02?ITC-02 must be filed within 30 days of the transfer, merger, or demerger being effective.
- What happens after filing ITC-02?After filing, the transferee must accept the transferred ITC in their GST portal for the transfer to be valid.
- Can I edit or revise an already filed ITC-02?No, ITC-02 cannot be revised or edited after submission. Errors must be addressed with GST authorities.
- What happens if ITC-02 is not filed?If ITC-02 is not filed, the unutilized ITC cannot be transferred, resulting in a potential financial loss for the business.
