Input Tax Credit: Five Common Mistakes to Avoid

Input Tax Credit is valuable, but it is also one of the most scrutinised areas under GST. A few avoidable mistakes account for most disputes.

First, claiming credit that does not appear in your GSTR-2B. Credit must be reflected by your supplier — reconcile monthly. Second, claiming blocked credits under Section 17(5), such as on motor vehicles or personal expenses.

Third, missing the time limit to claim credit for an invoice. Fourth, not reversing credit where payment to the supplier is not made within 180 days. Fifth, poor documentation — every claim should be backed by a valid tax invoice.

A disciplined monthly reconciliation of books, GSTR-2B and supplier filings keeps your claims clean and notice-proof. We set up and run this process for clients so nothing slips.