Input Tax Credit (ITC) Under GST — The Four Conditions, GSTR-2B and the Invoice Management System, Claiming a Missed Invoice, the 30 November Deadline, Blocked Credits, Reversals and How to Read Your Credit Ledger

Section 16 lets a registered person take credit of the GST charged on goods and services used in the course of business, subject to conditions that the portal now enforces mechanically. You must hold a tax invoice or debit note; the invoice must appear in your GSTR-2B (section 16(2)(aa)); you must have received the goods or services (for goods delivered in lots, on the last lot); the supplier must have paid the tax to the government (section 16(2)(c)); and you must claim it in a GSTR-3B. Credit is not available if the return in which it is claimed is filed after the time limit, or if the invoice relates to a period more than three years old.

1. 1GSTR-2B is generated on the 14th of every month (the 16th for the quarter end under QRMP) from suppliers' GSTR-1, IFF, GSTR-5 and GSTR-6 filed by the cut-off, plus ICEGATE import data. It does not change once generated.
2. 2Since October 2024 the Invoice Management System (IMS) sits before GSTR-2B: every invoice, credit note and debit note a supplier files appears in your IMS dashboard, where you Accept, Reject or keep it Pending. Accepted and untouched invoices flow into 2B; rejected ones do not; pending ones wait for a later month (within the time limit).
3. 3Reject an invoice that is not yours, is duplicated or is wrongly valued — the supplier is informed and corrects it through GSTR-1A or an amendment. Accepting a credit note reduces your credit in that period.
4. 4Download GSTR-2B (Excel/JSON) and match it to the purchase register: 2B-only invoices (in the portal, not in books) need an explanation; books-only invoices mean the supplier has not filed — follow up before the 30 November deadline.
5. 5Claim in GSTR-3B Table 4(A) exactly what 2B allows, show ineligible credit in 4(D)(1) and reversals in 4(B); the auto-populated 2B figures are the department's benchmark for DRC-01C notices on excess claims.

• •Motor vehicles for transport of persons with seating up to 13, vessels and aircraft — unless used for further supply, passenger transport, driving training or transport of goods; insurance, repairs and servicing of such vehicles follow the same rule.
• •Food and beverages, outdoor catering, beauty treatment, health services, cosmetic surgery, club and fitness memberships, life and health insurance, travel benefits to employees on vacation — unless the same category is supplied onward or is statutorily obligatory for the employer.
• •Works contract services and goods or services used for construction of immovable property on own account (other than plant and machinery) — offices and factories built for own use carry no credit on the construction cost.
• •Goods lost, stolen, destroyed, written off or given as gifts or free samples; goods or services used for personal consumption; tax paid under composition; tax paid on account of fraud, seizure or detention (sections 74, 129, 130).
• •Membership of clubs, CSR expenditure (from 1 October 2023), and inputs used for exempt or non-business supplies (proportionate reversal under rule 42/43).

1. 1Electronic Credit Ledger: Services → Ledgers → Electronic Credit Ledger shows the IGST, CGST, SGST and cess balances, every credit posted from GSTR-3B and every utilisation and reversal. This is the figure the video calls 'balance input'.
2. 2Utilisation order (rule 88A): IGST credit first against IGST, then CGST or SGST in any proportion; CGST credit against CGST then IGST; SGST credit against SGST then IGST; CGST and SGST credits cannot be set off against each other.
3. 3Rule 86B: where monthly taxable turnover exceeds ₹50 lakh, at least 1% of the output tax must be paid in cash unless an exception applies (income tax paid above ₹1 lakh in the last two years, refunds above ₹1 lakh, cash payments of more than 1% cumulatively, government bodies).
4. 4Rule 86A: the officer can block credit believed to be fraudulent for up to one year; the ledger shows a 'blocked' amount and the reasons must be communicated.
5. 5Refund of accumulated credit is possible only for zero-rated supplies (exports, SEZ) and inverted duty structure — not for ordinary unused balances.