also based on the purchase register of the taxpayer. There are some cases where ITC cannot be claimed at all for which you can refer to our blog: Cases where Input Tax Credit cannot be claimed.

Similarly there are a few preconditions that need to be met while claiming ITC. Let us understand in detail these preconditions that you need to take care while claiming ITC:

  • Taxpayer should be in possession of the tax invoice or debit note or relevant tax paying documents.
  • He should have received the goods and services.
  • Payment of such tax is made to the government by the vendor.
  • Taxpayer has furnished return under section 39.
  • Payment of invoice to the supplier should be done within 180 days from the date of issue of invoice. If payment is not done within 180 days then the ITC so availed by the recipient. (taxpayer) shall be added to his output tax liability, along with interest thereon, in such manner as may be prescribed.
  • No ITC will be allowed if depreciation has been claimed on tax component of a capital goods.
  • There is a time limit for claiming ITC which is earlier of Return filing due date of September of next financial year OR Actual annual return filing for current financial year.

Thus based upon the reconciliation results, there are several reports that you can consider to maximize your ITC claim.