Core concepts
- 01ITC eligibility (Sec 16): documents, receipt of supply, supplier paid tax, return filed.
- 02Sec 17(5) Blocked credits — motor vehicles (with exceptions), food/club/health, works contract, plant & machinery exception.
- 03Apportionment (Sec 17(2)+ Rule 42/43) — exempt vs taxable, business vs personal.
- 04Sec 18 — Special circumstances (new registration, switch composition→regular, exempt→taxable).
- 05Job work (Sec 19, 143) — credit allowed if inputs/CG returned within 1 yr / 3 yrs.
Flowchart
ITC Decision Flow | Eligible expense? -- check Sec 17(5) | Used for taxable supply only? -- if mixed, apportion | Documents + Supplier paid + Return filed? | ITC available -> Cr to Electronic Credit Ledger
Exam-critical pointers
- ⭐GSTR-2B auto-populated — Sec 16(2)(aa) requires reflection here for ITC.
- ⭐180-day non-payment to supplier triggers ITC reversal with interest; re-avail on payment.
- ⭐Sec 17(5) blocked: works contract for immovable property (except plant & machinery).
- ⭐ISD distinguished from cross-charge — ISD only for common input services.
Make it click