GSTR-2B auto-population. Eligibility, blocked credits Section 17(5), 180-day reversal rule, Section 16(4) time limit November 30. Cash flow critical.
ITC = Input Tax Credit. GST paid on PURCHASES (inputs) ko GST collected on SALES (outputs) ke against claim kar sakte hain. KEY: (1) GSTR-2B auto-populated monthly with eligible ITC. (2) Claim in GSTR-3B. (3) Net GST liability = output GST - input GST. (4) Eligible only if business use. (5) Supplier must file GSTR-1 for your ITC to appear. (6) Time-bound — claim within statutory deadlines.
ELIGIBILITY (all must be met): (1) Valid GST INVOICE from supplier with GSTIN. (2) Supplier filed GSTR-1 reflecting your purchase. (3) GOODS/SERVICES RECEIVED. (4) Tax paid by supplier to government. (5) Used for taxable business supply. (6) Not for personal use or exempted output. (7) Within time limits (Sept of next FY or annual return due date, earlier). DOCUMENTATION: maintain all purchase invoices + supplier details for 6 years.
BLOCKED CREDITS (NOT eligible for ITC) under Section 17(5): (1) MOTOR VEHICLES (except for transport business). (2) FOOD + BEVERAGES + outdoor catering. (3) BEAUTY treatment, health services, cosmetic services. (4) MEMBERSHIPS of clubs, fitness centers. (5) RENT-A-CAB, life insurance, health insurance (for employees, except statutorily required). (6) TRAVEL benefits to employees on vacation (LTC). (7) WORKS CONTRACT for construction of immovable property (not for resale). (8) GOODS or services for personal consumption. (9) GOODS lost, stolen, destroyed, written off.
180-DAY REVERSAL RULE: If buyer doesn't pay supplier within 180 DAYS of invoice date, ITC must be REVERSED + 18% interest. EXAMPLE: Receive invoice ₹1L + ₹18K GST (March 1). Claim ITC ₹18K. Don't pay supplier by August 27 (180 days). MUST reverse ITC + pay 18% interest. Can re-claim when supplier paid. PRACTICAL: maintain supplier payment ledger + 180-day tracker. Common compliance issue triggering scrutiny.
TIME LIMIT for ITC claim (Section 16(4)): (1) UP TO 30 NOVEMBER of next FY following the FY in which invoice was issued. (2) OR ANNUAL RETURN due date (December 31), whichever earlier. (3) BEYOND time limit: ITC LOST FOREVER. EXAMPLE: Invoice March 2026 (FY 25-26). Can claim ITC till November 30, 2026. After that, no ITC even if conditions met. CRITICAL: monthly GSTR-3B + annual reconciliation prevents missing deadlines.