Input Tax Credit (ITC) lets a GST-registered business reduce the tax it has already paid on purchases (inputs) from the tax it needs to pay on sales (output). You can claim ITC only if you meet the legal conditions under the GST law and have the required documents.
How to claim ITC?
- Be a registered person and have an active GSTIN
Only GST-registered taxpayers can claim ITC. Make sure your GSTIN is active and not suspended/cancelled. (You already must keep this updated in Miraqls settings.)
- Collect and keep valid tax invoices/credit notes
For every purchase or service (including your Miraqls annual subscription), retain the tax invoice or debit/credit note that shows supplier name, supplier GSTIN, invoice number/date, taxable value and GST amount. Miraqls issues GST invoices (for subscription and on-behalf invoices) - keep these invoices safe. Without a valid invoice you cannot claim ITC.
- Ensure receipt of goods or services and payment (as required)
You must have received the goods/services. For many services, ITC is allowed on receipt even if physical goods aren't involved. Also maintain proofs of payment where relevant (bank statements, payment vouchers) - these help during reconciliation or audits.
- Make sure the supplier has filed their return / invoice is visible in GSTR-2B
A critical practical step: under current rules you can generally claim ITC only when the supplier has uploaded the invoice details in their GSTR-1 and it appears in your auto-drafted statement (GSTR-2B). If the supplier hasn't filed correctly, the ITC may be blocked or denied. Always reconcile your purchase invoices with the GSTR-2B report.
- Check exceptions / blocked credits (Section 17(5))
Certain inputs are not eligible for ITC (for example - some motor vehicle uses, personal consumption, most goods/services for exempt supplies, and others listed under Section 17(5)). Verify that your expense is eligible before claiming.
- Record and reconcile in your books
Post the invoice in your purchase register, update the electronic credit ledger, and reconcile monthly with the GSTR-2B provided by the GST portal. Reconciliation helps avoid mismatches and objections later.
- Claim ITC while filing returns (GSTR-3B / relevant return)
When you file your monthly/quarterly GSTR-3B, report the eligible ITC amounts in the appropriate fields. The credit (if allowed) will be reflected in your electronic credit ledger and can be used to offset output tax. Follow the GST portal filing flow.
- Observe the time limit for claiming ITC
There is a statutory time limit: generally you must claim ITC before the due date of filing the return for September of the next financial year (or the date of filing the annual return), for the financial year to which the invoice relates. Don't miss this deadline.
- Keep supporting documents for audits / assessments
Retain invoices, delivery proofs, contracts, payment proofs and Miraqls invoices for at least the statutory retention period - they'll be required if the tax department asks for verification.