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Calculate your Input Tax Credit eligibility. Know your blocked credits under Section 17(5) and net GST payable.
Enter GST paid on purchases and GST collected on sales to see your ITC eligibility and net GST payable.
Input Tax Credit (ITC) is the GST you paid on business purchases that you can use to reduce the GST you owe on your sales. It prevents the cascading effect of taxes (tax on tax).
Example: If you paid ₹18,000 GST on raw materials and collected ₹30,000 GST on sales, you only need to pay ₹12,000 (₹30,000 - ₹18,000) to the government.
Eligible ITC = GST Paid on Purchases × (Eligible % / 100)
Net ITC = Eligible ITC − Blocked Credit
Net GST Payable = GST on Sales − Net ITCIf Net ITC exceeds GST on Sales, the excess can be carried forward to the next period or claimed as a refund.
ITC is essentially the GST government's way of avoiding double taxation. You pay GST when you buy raw materials. Your customer pays GST when they buy from you. Without ITC, GST would be charged twice on the same value. ITC lets you offset the GST you paid on inputs against the GST you collect from customers.
Example: You're a manufacturer. You buy raw materials worth ₹1,00,000 + 18% GST (₹18,000). You sell finished goods for ₹1,50,000 + 18% GST (₹27,000). Without ITC, you'd pay ₹27,000 to the government. With ITC, you pay ₹27,000 − ₹18,000 = ₹9,000. That ₹18,000 credit is your ITC.
This cascading effect prevention is what makes GST better than the old VAT system — in theory. In practice, there are restrictions and blocked credits that make it more complicated.
You must have a valid tax invoice or debit note
The invoice must be from a GST-registered supplier, show the supplier's GSTIN, your GSTIN, HSN code, and proper GST breakup. Informal receipts don't count.
Goods or services must have been received
You can't claim ITC on advance payments. ITC is available only after you actually receive the goods or services.
Tax must be paid by your supplier to the government
Even if you've paid your supplier and they've given you an invoice, if they haven't filed their GSTR-1 and paid GST, your ITC can be challenged. That's why GSTR-2B reconciliation is critical.
You must have filed your GSTR-3B
ITC can only be claimed in your GSTR-3B. The return for the relevant period must be filed — you can't claim ITC for a period whose return is pending.
Section 17(5) lists categories where ITC is permanently blocked — even if the purchase is 100% for business use.
| Purchase Type | ITC Status | Exception |
|---|---|---|
| Motor vehicles (car/bike) | BLOCKED | Goods transport, passenger transport business, motor vehicle dealers |
| Food & beverages, outdoor catering | BLOCKED | Hospitality/food service businesses |
| Beauty treatment, health services | BLOCKED | Businesses providing these services |
| Works contract (construction) | BLOCKED | Construction businesses for further supply |
| Club memberships | BLOCKED | None |
| Personal consumption | BLOCKED | None |
| Plant & machinery (works contract) | ELIGIBLE | No exception needed — it's allowed |
⚠️ Disclaimer: Calculations are for reference only. Verify with official GSTN portal or consult a CA before filing returns.
Calculate your Input Tax Credit (ITC) eligibility and savings under GST. Determine eligible ITC, blocked credits under Section 17(5), and net GST payable after claiming credit on your business purchases.
⚠️ Disclaimer: All calculations are for reference only. Verify with gst.gov.in or consult a qualified CA before filing returns.