What is Input Tax Credit in GST? How to get GST Refund?

Input Tax Credit (ITC) is Goods & Services Tax (GST) paid or payable by a registered person on the purchases or expenses incurred for the business activities.

Even though you have not paid any amount to your supplier, you can still claim the credit & get refund from the Customs Department.

For example, an hypermarket or superstore will normally have 3-6 months terms with their suppliers, they can claim the credit or even ask for refund from Customs Department after just receiving the tax invoices from their suppliers.


Criteria To Claim Input Tax Credit

 NoCriteria To Claim Input Tax Credit (ITC)

Compliance Status

1You must be a registered person, that’s taxable person.

Yes

2The goods or services must have been acquired in the course or furtherance of the business (means for business purposes).ITC is claimable on acquisition of capital assets used in the business (such as equipment, furniture, etc)

Yes

3Goods or services are acquired for making taxable supplies (standard-rated or zero-rated supplies)

Yes

4It must not be subject to any restriction such as blocked input tax items

Yes

5You must hold a valid tax invoice or valid customs importation documents

Yes

6Tax invoices must be in the name of the registered person unless simplified tax invoices are used.

Yes