Short answer: You can claim input tax credit (ITC) on business purchases only if you have the tax invoice, you have received the goods or services, the invoice appears in your GSTR-2B, the supplier has paid the tax, and you file your GSTR-3B. You must pay the supplier within 180 days of the invoice date, and claim the credit by 30 November after the end of the financial year (or the annual return date, if earlier). Credits listed in section 17(5) are blocked.
Conditions in section 16(2)
- You hold a tax invoice or debit note.
- You have received the goods or services.
- The supplier has reported the invoice in GSTR-1 and it is shown in your GSTR-2B.
- The supplier has actually paid the tax to the government.
- You have filed your return (GSTR-3B).
For goods received in lots, ITC is available when the last lot arrives.
Payment within 180 days
If you do not pay the supplier the value and tax within 180 days of the invoice date, the ITC must be reversed with interest. You can claim it again once you pay.
Time limit (section 16(4))
ITC on an invoice or debit note of a financial year can be claimed up to 30 November of the next financial year, or the date you file the annual return, whichever is earlier. Example: an invoice dated 15 March 2026 (FY 2025-26) must be claimed by 30 November 2026.
Blocked credits (section 17(5)), main items
- Motor vehicles for up to 13 people, with exceptions (further supply, transport of passengers, driving training).
- Food and beverages, outdoor catering, beauty treatment, health services, club and fitness memberships, unless used to make the same supply or required by law for employees.
- Works contract and goods or services for building immovable property on your own account (except plant and machinery).
- Goods for personal use, gifts, free samples, and goods lost, stolen or destroyed.
- Tax paid under the composition scheme or on demand from fraud cases.
Check before you claim
Match your purchase register with GSTR-2B every month. Bills missing in GSTR-2B mean the supplier has not reported them; follow up before the time limit. Our GSTR-3B and 2B reconciliation does this bill by bill.
Frequently asked questions
Can I claim ITC if the invoice is not in GSTR-2B?
No. Under section 16(2)(aa) and rule 36(4), ITC is available only for invoices shown in your GSTR-2B.
Can a composition dealer claim ITC?
No. A composition taxpayer cannot claim input tax credit.
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Official sources
Rules on this page come from these official government sources. Check them for the latest position.
More guides
GST invoice format
Every field a GST tax invoice must have (rule 46), copies, time limits and e-invoicing.
GSTR-1 vs GSTR-3B
What each return contains, due dates for monthly and QRMP filers, late fee and how they link.
Credit note and debit note in GST
When to issue each (section 34), the time limit, the fields and how to report them in GSTR-1.
Last updated: 7 November 2026. Published by S Jha Legal Sansar & Associates. Rules as applicable for FY 2026-27; laws change, so check the official source before you act. Editorial policy · Disclaimer