The concept of Input Tax Credit (ITC) under GST is a
fundamental mechanism that enables registered taxpayers
to offset the tax paid on inputs against the tax liability
on output supplies. It is important to note that the
eligibility criteria for claiming ITC are clearly defined
under Section 16 of the CGST Act, 2017.
Key conditions for claiming ITC include the following:
-
The taxpayer must be in possession of a valid tax
invoice or debit note issued by a registered supplier. -
The said goods or services must have been received
by the taxpayer. -
The tax charged in respect of such supply must have
been actually paid to the government. -
The taxpayer must have filed the relevant GST returns.
Furthermore, it is worth noting that certain categories
of inputs are blocked under Section 17(5) of the CGST
Act and ITC cannot be claimed on such inputs under any
circumstances.
