Introduction:

This document explains the concept of Input Tax Credit (ITC) and the guidelines for businesses to
claim ITC under the Goods and Services Tax (GST) regime.

1. What is ITC?
ITC allows businesses to claim credit for the GST paid on inputs (goods or services) used in the course
of business. It reduces the overall tax liability, promoting the cascading effect of taxes.

2. Eligibility for ITC:

To claim ITC, businesses must:

Be registered under GST.

Possess a valid GST invoice or other prescribed documents.
Have received the goods or services.
Use the inputs for taxable supplies.
3. Blocked Credits:
Certain inputs, such as those used for personal consumption or exempted supplies, are not eligible for
ITC. Businesses must adhere to the list of blocked credits to avoid non-compliance.

4. Time Limit for Claiming ITC:

ITC can be claimed within a specified time limit, typically by the due date of the September return of
the following financial year or the annual return, whichever is earlier.

5. Reversal of ITC:
In some cases, such as partial use for non-business purposes, businesses may need to reverse a
portion of the claimed ITC. This process is governed by GST regulations.