When a person cannot claim ITC under GST

1) Person not registered

If a person is not registered under GST, he cannot claim Input Tax Credit.

2) If Supplies not used by Registered person in his business 

3) Tax Invoice / Other tax paying document Not received :

Tax paying documents 

• Debit Note u/s 34 of CGST Act
• Bill of Entry
• Input Service Distributor invoice or Input Service Distributor credit not

4) Goods or Services not received

If the registered person has not received the Goods or Services or both, he can not claim Input Tax Credit.

5) Supplier has not paid the Tax

If the Supplier has not paid the Tax charged on Goods or Services or both, recipient can not claim Input Tax Credit.

6) If GSTR 1 and GSTR 2 (Return of Inward and outward Supply) not filed

7) Goods received in lots or instalments

Registered person shall not claim ITC on Goods received in lots or instalments. It will be available for all goods only  on receipt of Last Installment of those goods.

8) Payment not made to supplier

If recipient of goods or service or both has not paid the supplier within 180 days from date of invoice, the amount of input tax credit availed of proportionate to such amount not paid to supplier along with the interest will be added to output liability of the recipient.

9) Depreciation claimed under Income Tax Act

Where the registered person has claimed depreciation on the tax component of the cost of capital goods and plant and machinery under the provisions of the Income Tax Act, 1961, the input tax credit on the said tax component shall not be allowed.

10) Time Limit to Avail Input Tax Credit:

Section 16(4) of CGST Act 2017

A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both

• After the due date of furnishing of the return under section 39 for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains or
• Furnishing of the relevant annual return, whichever is earlier.

11) Tax Invoice / tax paying document not correct

If Tax Invoice / tax paying document does not contain all specified particulars (e.g GSTIN No not mentioned on Invoice etc ) or these particulars not filed in GSTR 2 ( Inward Supply return) .Then registered person can not claim Input Tax Credit. 

12) Tax Paid due to Demand confirmed

If Tax Paid due to Demand confirmed for fraud, wilful misstatement or suppression of facts ,then registered person can not claim Input Tax Credit.

13) Time Limit to Avail Input Tax Credit in case taking GST Registration

• Person who has applied for registration under CGST Act within 30 days from the date on which he becomes liable to registration
• A person who takes registration under sub-section (3) of section 25 ( Voluntary Registration)
• Where any registered person ceases to pay tax under Composition Scheme and he becomes liable to pay tax under section 9 (Regular Scheme):
• Where an exempt supply of goods or services or both by a registered person becomes a taxable supply