Input tax credit, explained

Input tax credit lets you reduce the GST you owe on sales by the GST you already paid on business purchases. It is the mechanism that stops tax piling on tax.

Conditions to claim

• You have a valid tax invoice.
• You actually received the goods or services.
• Your supplier reported the invoice (it shows in your GSTR-2B).
• You filed your return.

What you cannot claim

Some credits are blocked, such as personal expenses, most motor vehicles, and club memberships. Keep business and personal purchases separate.