GST – Claiming ITC – Forms and Documents Required

ITC is used for describing conditions to Input Service Distributor, capital goods, transition, etc. we have discussed the principals relating to all these situations. But to understand how this will work in practical situations and what procedures are to be followed by taxpayers to claim this Input Tax Credit.

Document required for claiming ITC

To claim ITC, one of the major prerequisites is to make sure that the registered taxpayer making a claim for such Input Tax Credit is in possession of a document evidencing payment of taxes by the taxpayer. The documents that are covered under the head, or in other words documents that are accepted by the authorities and is to be attached to the return of GSTR-02 include the following:

  • Any invoice issued by the supplier as per the Invoice Rules specified by the government evidencing the supply of goods and services or both.
  • If there has been an increase in the contract price, then any debt note issued evidencing such increase issued by the supplier of goods or services.
  • Any revised invoice issued by the supplier
  • Any invoice issued by the recipient in any case including when the reverse charge is applicable.
  • Any document including invoice or credit note published by Input Services Distributor.
  • Any bill of entry
  • Any bill of supply or other document issued by Customs Department. 

Forms and Procedure for Transition of ITC

Any taxpayer who was registered under any previous laws and was eligible to claim Input Tax Credit under such laws have the right to transfer such credit under Goods and Service Tax laws. However, for transition of ITC under GST certain conditions are to be satisfied like;

  • This amount of credit is eligible as ITC under GST.
  • All the returns required to be filed under old laws in the preceding 6 months are duly filed.
  • Such inputs are used for making taxable supplies under GST.
  • ITC can only be claimed on the basis of invoices issued in the last 12 months just before GST implementation.

Forms to be filed

Now, that we have discussed who is eligible to claim such transition of GST. Let’s discuss what are the forms required to be filed for such transition. Every taxpayer who was:

  1. Registered under any previous law, or
  2. Was engaged in manufacture of exempted goods or provision of exempted services

Are required to file a declaration of such claimed ITC in FORM GST TRAN- 1 on the common portal within 90 days starting from the date of implementation of GST i.e. 1st July 2017.

Additional provisions for other people, i.e. who were neither registered under old laws nor were engaged in the manufacture of exempted goods are required to submit a statement in FORM GST TRAN-2 at the end of the 6 consecutive tax periods during which the scheme is in operation.

Provisions in Certain Special Circumstances

  • If any taxpayer who was either
  • Registered under Composition Scheme and opts out of such scheme or
  • Who was earlier supplying exempted goods which are now taxable,

Are required to file a declaration in FORM GST TRAN- 1.

Details of ITC furnished in such form are to be verified with the details furnished by the supplier in their GSTR-1 or GSTR-4, as the case may be.

  • Transfer of credit on sale, merger, amalgamation, lease or transfer of a business

Any person covered under these situations are required to file details in FORM GST ITC-02, along with They have an obligation to file a request for transfer of unutilized input tax credit lying in his electronic credit ledger to the transferee.

After which the transferee is required to verify the information provided by the transferor, only after which lying credit is credited to his electronic credit ledger.

Other Forms to be Filed by Taxpayer

  • The first form that is required to be filed that includes information relating to ITC is GSTR-2. This return is required to be filed by 15th of every next month and contains details relating to inward supplied. As ITC is the credit claimed for tax paid on inward supplies, thus its information is to be entered in GSTR-02.
  • FORM GST ITC-04 This form is required to be filed inputs and capital goods sent to the job worker. In this form details of challans in respect of goods dispatched to a job worker or received from a job worker or sent from one job worker to another during a quarter.