29/07/2021
GST ITC 01: Step-by-Step Guide to Claim ITC on New GST Registration
👉In order to claim Input Tax Credit (ITC), the person carrying on regular business and holding stock of inputs, capital goods and finished goods at their place of business has to obtain GST registration. ITC cannot be claimed before the date of obtaining GST registration.
👉What is ITC 01?
GST Form ITC-01 is a declaration form that is used to claim the ITC. An input tax credit means that a taxpayer can claim the amount that has been already paid as GST while making a GST payment to the Government which was collected from the customers.
Cases when ITC-01 must be filed
The declaration form in ITC – 01 is required to be filed in the following cases:
🎗️When an application for GST registration is made within 30 days of becoming liable to pay GST. [Section 18(1)(a)]
🎗️When any person opts for voluntary registration. [Section 18(1)(b)]
🎗️When any person opts out of composition scheme but continues to be registered as a regular taxpayer. [Section 18(1)(c)]
🎗️When an exempt supply of goods/services becomes taxable supply. [Section 18(1)(d)]
It should be noted that ITC cannot be claimed if the person fails to file Form ITC – 01.
Types of input tax credit allowed
🎗️Input tax credit in respect of inputs held in stock on the cut-off date.
🎗️Input tax credit in respect of inputs contained in semi-finished goods on the cut-off date.
🎗️Input tax credit in respect of inputs contained in finished goods on the cut-off date.
🎗️Input tax credit in respect of capital goods on the cut-off date.
Note : Applies only in cases where a composition dealer opts out of the composition scheme and where exempted supply becomes taxable supply.
Cut-off dates for claiming of ITC and the timelines
Form ITC – 01 is required to be filed within 30 days of the person become eligible to claim ITC i.e. 30 days from grant of registration or opting out of composition scheme.
CASE
CUT-OFF DATE
NO OF TIMES ITC CAN BE CLAIMED BY FILING ITC 01
When the application for GST registration is made within 30 days of becoming liable to pay tax [Section 18(1)(a)]
Date immediately preceding the date when he becomes liable to pay tax.
Once
When any person who opts for voluntary registration [Section 18(1)(b)]
Date immediately preceding grant of registration
Once
When any person opts out of composition scheme but continues to be registered and pay tax as a regular taxpayer [Section 18(1)(c)]
Date immediately preceding day when he opts to pay tax under regular mode.
Once in a year
When an exempt supply of goods/services becomes taxable supply [Section 18(1)(d)]
Date immediately preceding the date when the supply becomes a taxable supply
Once in month
Points to remember while filing ITC 01
🎗️Know what input tax credits can be claimed. For example, the ITC in respect of services cannot be claimed in Form ITC 01. ITC in respect of capital goods can only be claimed in case composition dealer opts out of composition scheme and where exempted supply becomes taxable supply.
🎗️Invoice wise Details of ITC on purchases as on the cut-off date should be available.
🎗️Form ITC 01 should be filed within 30 days of the date of registration/migration to a regular scheme.
🎗️Invoices up to one year old can be claimed in case of inputs and up to five years in case of capital goods.
🎗️If the ITC claim is more than INR 2 lakhs, Chartered Accountant certificate or Cost Accountant certificate must be uploaded.
Steps file Form ITC-01
👉Step 1: The taxpayer has to login to the official GST Portal.
👉Step 2:The taxpayer has to enter the username and password.
👉Step 3: From the ‘Services’ tab, the taxpayer has to select ‘Returns’ and then click on ‘ITC Forms’. The GST ITC Forms page is displayed on the screen.
👉Step 4: Under GST ITC – 01, click the ‘Prepare Online’ button if the taxpayer desires to provide a statement by making entries on the GST Portal.
👉Step 5: The taxpayer has to select the appropriate section from the ‘Claim Made Under’ drop-down list.
🎗️ Proceed to file the necessary details invoice-wise as given below:
🎗️Select the type of goods. (The option available under this field are – (i) Inputs held in stock, (ii) Inputs contained in semi-finished goods or finished goods, (iii) Capital goods. Thus, it is necessary for the taxpayers filing Form ITC – 01 to maintain a detailed stock register with records of procurement and consumption of inputs.)
🎗️Enter GSTIN of supplier
🎗️Enter invoice number and date (This date must be prior to the grant of approval for registration and not more than one year in case of inputs and five years in case of capital goods)
🎗️Select Unit Quantity Code
🎗️ Description of goods -Inputs Enter quantity Enter invoice value (The amount of invoice value should be reported after adjusting the value of debit/credit notes issued against the relevant invoice)
🎗️Enter ITC amount (CGST and SGST or IGST)
🎗️It is noteworthy, for claims made under Section 18(1)(d), a date on which goods become taxable must also be entered.
🎗️Click on ‘Add’ button to continue adding more invoices or Click on ‘Save button’ to proceed to submit.
👉 Step-6: After entering all invoices, click Preview > Submit > Proceed. Note that no modification is allowed after status turns are submitted or you click on Proceed.
👉Step-7: Upload CA certificate, if applicable.For claims of more than INR 2 lakhs, the details of Chartered Accountant or Cost Accountant need to be updated along with the certificate.
👉Step-8: File the form using DSC or EVC Once the form is successfully submitted, Click on ‘File using DSC’ or File using EVC’ button and select the authorized signatory from the drop-down list to file using DSC or EVC.Once filed, ARN is generated and sent to the taxpayer via SMS or Email. The status of GST ITC 01 is changed to ‘Filed’.
👉 The ITC claimed in Form ITC 01 is then made available in the electronic credit ledger.
