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Stage 1 · GST basics

GST-5: Input Tax Credit

Sort Selvi’s pile of November bills: which GST comes back as credit, which is blocked, and what happens when a supplier forgets to upload or you forget to pay.

What you will learn in GST-5

  • Which purchases give input tax credit (s. 16)
  • The conditions, GSTR-2B and the Invoice Management System
  • Blocked credits (s. 17(5))
  • The 180-day payment rule and using CGST and SGST credit

Chapters

  1. The pile of bills · Credit only for GST on what the business uses for its business (s. 16(1))
  2. Four conditions before you claim · A bill, the goods, the supplier’s filing, and your own return (s. 16(2))
  3. Accept, reject, and pay on time · The Invoice Management System and the 180-day rule (s. 16(2) proviso)
  4. Blocked or allowed? · The list of things the law will not give credit for (s. 17(5))

Key terms

  • GSTR-2B (s. 16(2)(aa)): A monthly statement on the portal listing the bills your suppliers have reported. It is the list your credit is checked against.
  • Invoice Management System (IMS) (s. 16): A screen on the GST portal where the buyer accepts, rejects or keeps pending each bill its suppliers report, before GSTR-2B is made.

Common questions

What are the conditions for input tax credit?

You must hold the tax invoice, the bill must appear in your GSTR-2B, you must have received the goods or services, the supplier must have paid the tax, and you must file your return (section 16(2)).

Can I claim GST on a car or on food?

Generally no. Section 17(5) blocks credit on cars for people (with a few business exceptions), food and drink, club fees and personal use.

What if I don’t pay my supplier within 180 days?

You reverse the credit on that bill with interest, and claim it again once you pay.

CGST Act, 2017, ss. 16, 17(5) and 49; rule 37. Checked against the GST law in force on 8 November 2026. Selvi Garments, the school order and every figure in this lesson are fictional. Read the official text on the CBIC GST Acts and Rules page ↗ before applying it to real work.