What is Input Tax Credit?
Input Tax Credit, commonly known as ITC, allows eligible registered taxpayers to claim credit for GST paid on qualifying business purchases, subject to the conditions and restrictions prescribed under GST law.
Key ITC compliance checks
Verify that purchase invoices contain the required information.
Check supplier-reported invoice details and relevant GSTR-2B information.
Confirm that the purchases are eligible for ITC under applicable law.
Maintain evidence of receipt of goods or services and other required records.
Review blocked credits and applicable time limits before claiming credit.
Why is GSTR-2B reconciliation important?
Reconciling purchase records with GSTR-2B can help identify missing invoices, differences in taxable values, incorrect GSTINs, and other discrepancies that need investigation.
A difference in records does not automatically mean that credit is eligible or ineligible. Each case must be checked against the applicable legal requirements.
Conclusion: Regular ITC reconciliation helps improve accounting accuracy and supports better GST compliance.
