TL;DR for CAs
- Rules 42/43 govern proportionate reversal for exempt supplies.
- Rule 37 addresses non-payment to suppliers.
- Blocked credits under Section 17(5) are often missed.
What it is
Input Tax Credit is available subject to eligibility, documentation, and reversal provisions in the CGST Act and Rules.
Who it applies to
Taxpayers with exempt supplies, personal use, or delayed supplier payments.
Key provisions
- Section 17(5) blocked credits
- Rule 37 reversal timelines
- Annual true-up for Rules 42/43
Practical tips for CAs
Build an ITC eligibility matrix by expense GL. Reconcile GSTR-2B monthly.
Common mistakes
Claiming motor vehicle ITC incorrectly; skipping Rule 37 follow-up; ignoring construction-related blocks.
For general guidance only. Verify with the latest Finance Act, GST notifications, and ICAI guidance notes before advising clients.