Input Tax Credit’ or ‘ITC’ means the Goods and Services Tax (GST) paid by a taxable person on any purchase of goods and/or services that are used or will be used for business.
ITC value can be reduced from the GST payable on the sales by the taxable person only after fulfilling some conditions. These conditions given under the GST law are more or less in line with the pre-GST regime, except for a few additional ones such as GSTR-2B. These rules are direct and maybe stringent in nature.
The time limit to claim ITC against an invoice or debit note is earlier of two dates, given below:
- 30th November of the next financial year.
- The date of filing the annual returns in form GSTR-9 relating to that financial year.
Under GST regime, ITC can be availed by every registered taxable person on all inputs used or intended to be used in the course of or for the furtherance of business – be it goods or services. Similarly, ITC will also be available on capital goods used in the course of business, except for a few exceptions