Essential compliance rules under Section 16, Section 17(5) blocked credits, and monthly reconciliation.
A comprehensive guide on GST Input Tax Credit (ITC) eligibility under Section 16, GSTR-2B reconciliation best practices, and blocked credits under Section 17(5).
Input Tax Credit (ITC) allows businesses to offset tax paid on inward purchases against outward tax liabilities. To claim ITC legally under Section 16, the buyer must possess a valid tax invoice, goods/services must be received, tax must be paid to the government, return must be filed, and invoice must reflect in auto-generated GSTR-2B.
Mandatory statutory criteria for claiming input tax credit
Buyer must hold a valid tax invoice or debit note with statutory details.
Actual receipt of underlying goods or services is mandatory before claiming credit.
Supplier must file GSTR-1 and invoice details must reflect in buyer's GSTR-2B.
Value of supply plus tax must be paid to supplier within 180 days of invoice.
Clear answers to common client questions
GSTR-2A is dynamic and continuously changes as suppliers upload invoices. GSTR-2B is a static, monthly auto-drafted statement generated on the 14th of each month that serves as the official legal basis for claiming ITC in Form GSTR-3B.
Consult Adv. Sachin Kumar Mishra for GSTR-2B reconciliation audits, DRC-01 notices, and GST appellate representation.
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