prpri Review of Input Tax Credit availed under GST for FY 2017-18 Review of Input Tax Credit availed under GST for FY 2017-18

As per the provisions of Goods & Service Tax Laws, where registered person makes an undue or excess claim of input tax credit under GST shall reverse or pay the amount of excess claim Input Tax Credit (ITC) along with interest at the rate of 24% pa and may also face penalty if any charge by the department.

It is recommended that the industry and trade needs to carry out “Review of Input Tax Credit for the FY 2017-18” before the last date of filing of September 2018 return [October 20th 2018]. It is also recommended that Reconciliation Statement should also be prepared to match ITC availed in GSTR-3B with ITC shown in GSTR-2A.

Some of the common illustrative errors in ITC availed has been provided below for ensuring that the ITC review is effective:-

  • ITC being taken against supplies for use in course or furtherance of business
  • ITC being taken against exempt supplies of goods or service
  • ITC taken against goods or services or both used for personal Consumption
  • ITC shall not be available in respect of supplies prescribed u/s 17(5)
  • Taking ITC on Invoice without mention of particulars specified in Rule 46
  • Input Tax credit of tax payable on RCM without making payment of the same
  • Taking ITC on Invoice basis without received of goods or service
  • Taking ITC on goods received on lots without receipt of last Lot
  • ITC not reversed against goods or services for payment not made within 180 days from date of issue of invoice
  • ITC cannot availed for the FY 2017-18 after the due date of filing September, 2018 month return i.e 20th October, 2018
  • Taking credit against capital goods against for preregistration Date
  • Taking credit against input held in stock on date of application for registration inspite applying for registration after 30 days from the date of liability to get registered
  • Taking ITC for input held in stock on registration date without making declaration in Form GST ITC -01 by providing information of stock
  • Non Inclusion of non-taxable supplies in total turnover while calculating ITC attributable to exempt supplies
  • Not including stamp duty value of land and building and 1% of sale value of securities in exempt supply
  • Not segregating capital goods being exclusively used in making exempt supplies and allowing ITC to merged for ITC of common capital goods
  • Non reversal of 5% of Common Credit on account of non-business use of inputs/input services
  • ITC taken against goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples
  • ITC taken against motor vehicles and other conveyance [not used for transportation of goods and also not used in providing taxable supplies of further supply of such vehicle, and further also not used for transportation of passenger, and imparting training.]
  • ITC taken against works contract service or goods or services used for construction of immovable property other than plant and machinery except when used for further supply of works contract service or such goods or service

GST Audit:-

In GST every registered person (GSTIN-Wise), whose turnover during the financial year exceeds Rs.2.00 crore rupees, shall get his accounts audited by a Chartered Accountant. However GST audit under Section 35 (5) of CGST Act 2017 has not been notified till date. If a registered person is liable to get his accounts audited under Section 35, all the registrations obtained under the same PAN will also be liable for such audit, regardless of the turnover in each State in which the other registrations have been obtained.

Note:- The above information are not intended, and must not be taken, as legal advice on any particular set of facts or circumstances. While every effort has been made to keep, the information cited in this article error free, team GSTCORNOR does not take the responsibility for any typographical or clerical error which may have crept in while compiling the information provided in this article. GSTCORNOR disclaim all liability in respect to actions taken or not taken based on any or all the contents of this article to the fullest extent permitted by law.

Do not act or refrain from acting upon this information without seeking professional legal counsel.


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GSTCORNOR® is a trusted and versatile professional firm, set up by group of professionals in 2016 aimed at delivering valued added and expertise services in the domain of Indirect Taxation specially Goods & Service Tax Law. Over a period of 3.5 years, GSTCORNOR® has grown exponentially and a View Full Profile

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One Comment

  1. GSTCORNOR says:

    Please update first line in illustrative as below:-

    ITC being taken against supplies for not use in the course or furtherance of business

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July 2021