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When can a business claim ITC

Businesses can claim Input Tax Credit (ITC) when goods or services are received, used for business, and documented with valid tax invoices. ITC claims are not allowed for personal use or exempt supplies. Seek advice from a financial advisor for precise claim guidance. Trust Divadhvik for expert financial services.<br><br>

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When can a business claim ITC

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  1. When can a BUSINESS CLAIM ITC? Let’s Understand! Divadhvik_official www.divadhvik.com

  2. Input Tax Credit (ITC) is the credit of GST paid on purchases that can be used to offset the output tax liability. It's like getting a refund for the taxes you paid on business expenses. Divadhvik_official www.divadhvik.com

  3. CONDITIONS FOR CLAIMING ITC: Registered under GST: Your business must be registered under the GST regime. Possession of Tax Invoice: You must have a valid tax invoice for the purchase. Goods/Services Used for Business: The purchased goods or services should be used for business purposes, not personal consumption. Supplier's Tax Payment: The supplier must have paid the GST to the government. Timely Payment: You must pay the supplier within 180 days of the invoice date. Divadhvik_official www.divadhvik.com

  4. ITC AND GSTR-2B: Matching of Invoices: ITC can only be claimed if the details of the invoice appear in your GSTR-2B. Importance of Reconciliation: Regular reconciliation of your GSTR-2B with your purchases is crucial for accurate ITC claims. Divadhvik_official www.divadhvik.com

  5. COMMON ITC MISTAKES Claiming ITC on Capital Goods: Depreciation cannot be claimed on the tax component of capital goods. Delay in Payment: If payment to the supplier is delayed beyond 180 days, ITC claimed will be reversed. Incorrect Input Tax Classification: Misclassifying input tax can lead to incorrect ITC claims. Divadhvik_official www.divadhvik.com

  6. TIPS FOR EFFECTIVE ITC CLAIMING Maintain Proper Records: Keep detailed records of all purchases and related documents. Reconcile Regularly: Regularly reconcile your GSTR- 2B with your purchases to identify discrepancies. Seek Professional Advice: Consult with a GST expert for complex ITC-related issues. Divadhvik_official www.divadhvik.com

  7. Follow for more Follow for more ! Disclaimer ! ! Disclaimer ! Investment in securities market are subject to market risk please read all related documents carefully before investing. Divadhvik Corporate Services Pvt Ltd are not liable or responsible for any of your (Investor’s) profit or loss in market related securities investments. Divadhvik_official www.divadhvik.com

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