Input credit can be defined as that amount of taxes which can be waived off in outputs if previous taxes were paid on the inputs. It is a mechanism you can avail of if you are a manufacturer, agent, supplier, aggregator, or e-commerce operator covered under the GST Act.

The main benefit of claiming Input Tax Credit is that it reduces your tax liability. There are other advantages too. Without the input tax credit, there would be a tax on tax, which would defeat the purpose of implementing the GST Act.

Eligibility for claiming Input Credit

Your tax invoice is compliant with the Goods and Services Tax.

You have already received the goods or services or both.

In the case of receiving goods in instalments, input credit can be claimed after receiving the last lot.

Input credit cannot be availed if you have claimed depreciation on the tax part of the cost of your capital goods.

The invoice has been uploaded to the GSTN by your supplier.

GST has been paid to the government by your supplier.

Your supplier has filed the GST returns.

To get input credit, you have to claim it within the stipulated time limit.

Input credit is only available to you if your supplier has also paid GST. Hence, when you make a claim, it will be matched and validated before you receive the benefits. Also, to claim input credits, your supplier has to be GST compliant too. One can consult a Tax consultant in Delhi to make this job easier and to avoid all hassles.

Documents required for claiming Input Tax Credit

The invoice issued by your supplier

Invoice issued by you, when you receive goods and services from an unregistered business.

The debit note issued by your supplier, if the tax charged in the invoice is less than the tax payable.

A Bill of Entry, in case of imports.

A Credit Note or invoice issued by the Input Service Distributor.

A Bill of Supply issued by a dealer, exporter or supplier of exempted goods.

However, you should also be careful so that your input credit benefits don’t get reversed. The conditions in which it might get reversed are:

Personal use of goods and services and/or capital goods.

Failure to pay your supplier within 180 days of issue of the invoice.

Use goods and services for the production of exempted supplies.

Selling plants and machinery and capital goods.

Transfer to composite levy from GST.

Cancellation of business registration.

For carrying out the above tasks, you can contact any GST consultant in Delhi. Manish Anil Gupta & Co. is a leading audit firm in Delhi

Also, read more info about the Company registration in Delhi