Documents and Conditions for claiming ITC under GST

In our previous articles about Input Tax Credit (ITC), we have made discussions on various issues associated with ITC. However, the foremost condition & prerequisite for claiming ITC is that the taxpayer should have a valid document in his possession for claiming input tax credit. In the absence of the valid document, the department may deny the claim of ITC of the taxpayer. Rule-36(1) of CGST Rules prescribes such specified documents on the basis of which ITC may be claimed.

Documents required for claiming ITC

A registered person (including Input Service Distributor) can take the ITC on the basis of any of the following documents as prescribed under Rule 36(1): -

• An Invoice issued by the supplier of goods or services or both as per the GST Rules
• Debit Note issued by the supplier of goods or services or both in case of increase in the agreed sales price
• An Invoice raised by the recipient of goods or services or both in case of inward supplies liable for tax under Reverse Charge Mechanism, subject to payment of tax
• A Bill of entry or similar document prescribed under Customs Act, 1962
• Invoice or credit note issued by Input Service Distributor in accordance with rule 54(1) of CGST Rules, 2017

Having possession of prescribed documents is not sufficient for claiming ITC:

The taxpayer should also keep in mind that having the above prescribed documents is not sufficient for claiming ITC. Following further conditions should also be fulfilled for valid claim of ITC:

• According to Rule 36(2), Input Tax Credit shall be availed by the taxpayer only if all the details as prescribed and contained in the said document is furnished in FORM GSTR-2.
• However, it is also prescribed that if the said document does not contain all the specified particulars but contain the following details, ITC may be availed by the registered person:
  (a) Details of amount of tax charged
  (b) Description of goods or services
  (c) Total value of supply of goods or services or both
  (d) GSTIN of supplier and recipient and
  (e)Place of supply in case of inter-state supply
• ITC cannot be claimed in case the tax has been paid by the taxpayer due to an order where any demand is raised due to any fraud, willful misstatement or suppression of facts.
• Tax should have been actually paid by the taxpayer either in cash or through utilizing balance available in electronic credit ledger.

Conclusion:

Under GST, the taxpayer may avail ITC only when he is having possession of valid invoice or debit note or other prescribed document evidencing supply of goods or services. Further, such ITC should be available only if tax has been paid by the supplier on such goods & services and has also declared such invoices with details as prescribed in his GSTR-1.

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