Input Credit Availment Criteria-GSTR 3B Return

Goods and Services Tax (GST) has been implemented in India with the aim of simplifying the indirect tax structure, removing the cascading effect of taxes and ultimately easing the business environment. One of the key features of GST is the Input Tax Credit (ITC) which allows taxpayers to claim credit of the taxes paid on purchases made for business purposes. The ITC can be claimed only if certain conditions are fulfilled, failing which the credit cannot be availed. This article will discuss the criteria for availing ITC under the GSTR 3B return.

What is GSTR 3B?

GSTR 3B is a monthly return to be filed by regular taxpayers who have registered under GST. It is a summary return in which a taxpayer needs to provide details of the outward supplies, inward supplies, ITC availed and tax paid. The due date for filing GSTR 3B is the 20th of the following month.

Conditions for Availing Input Tax Credit under GSTR 3B

To avail the input tax credit under GSTR 3B, the following conditions have to be satisfied:

1. Proper Receipt of Goods or Services

The taxpayer must have proper receipt of goods or services. This means that the taxpayer must have received the goods or services along with the invoice or any other prescribed document. If the taxpayer has not received the goods or services or the invoice, then the ITC cannot be claimed.

2. Supplier has Filed GSTR 1

The supplier from whom the goods or services have been procured must have filed GSTR 1. GSTR 1 is a monthly return filed by the supplier in which the details of the outward supplies are provided. If the supplier has not filed GSTR 1, then the ITC cannot be claimed.

3. Payment of Tax by Supplier

The supplier from whom the goods or services have been procured must have paid the tax to the government. If the supplier has not paid the tax, then the ITC cannot be claimed.

4. Payment of Tax by Recipient

The recipient must have paid the tax on the outward supplies made by him. If the recipient has not paid the tax, then the ITC cannot be claimed.

5. Return Filing

The taxpayer must have filed GSTR 3B for the relevant tax period. If the taxpayer has not filed GSTR 3B, then the ITC cannot be claimed.

6. Eligible Supplies

The ITC can be claimed only on eligible supplies. Eligible supplies are those supplies which are used for business purposes. If the supplies are used for personal purposes, then the ITC cannot be claimed.

7. Tax Invoice

The ITC can be claimed only on the basis of a tax invoice. The tax invoice should contain details such as the name, address and GSTIN of the supplier, the name and address of the recipient, the description of the goods or services, the value of the goods or services, the tax charged and the signature of the supplier or his authorized representative.

8. Reconciliation of Books of Accounts

The taxpayer must reconcile the books of accounts with the GST returns filed. If there is any discrepancy, then corrective measures should be taken.

Conclusion

Input Tax Credit is an important feature of GST which enables taxpayers to claim credit of the taxes paid on purchases made for business purposes. However, the credit can be availed only if certain conditions are fulfilled. It is important for taxpayers to understand the criteria for availing ITC under GSTR 3B and ensure compliance with the same.