What are the forms and documents required for claiming ITC?

Ashish M. Shaji

03 Dec, 2020

We have discussed a lot about Input Tax Credit in our previous blogs, a lot of related topics and conditions relating to claiming ITC under different situations have been discussed.

Topics including what ITC is, describing conditions to Input Service Distributor, capital goods, transition, etc. we have discussed the principals relating to all these situations. But we also need to understand how this will work in practical situations and what compliances in terms of filing forms and submitting documents 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 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^[1]. 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 Registration 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- 1on the common portal within 90 days starting from the date of implementation of GST i.e. 1^st 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 under GST 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  that 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 in relation to ITC

• When the supplier files form GSTR-1, the corresponding details are captured in GSTR-2A of the recipient. The filing of GSTR-2 form has been kept in abeyance, taxpayers should reconcile the ITC claimed in form GSTR-3B and form GSTR-2A. 
• 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.

Conclusion

The forms and documents required for claiming ITC (Input Tax Credit) should be filled and submitted within the prescribed time period under GST. In case you have any doubt regarding the same, contact Enterslice.

Read our article:Section 23 of CGST Act: Persons not liable to take GST registration