Goods and Services Tax (GST) is an indirect tax system implemented in India on 1st July 2017, which replaced a multitude of existing indirect taxes. It is a consumption-based tax levied on the supply of goods and services, and it is designed to eliminate the cascading effect of taxes. The GST system is based on the principle of input tax credit, which allows businesses to claim credit for the taxes they have already paid on their purchases. Overall, GST has simplified the tax system, reduced tax compliance costs, and made it easier for businesses to operate across different states in India. However, claiming ITC can be a complex process, and businesses need to follow a specific procedure to ensure that they are claiming the correct amount of credit. In this article, we will discuss how to check Input Tax Credit in the GST portal.
What is Input Tax Credit (ITC)?
Before we dive into how to check ITC on the GST portal, let us understand what ITC is. In simple terms, ITC is the credit that a business can claim for the taxes they have already paid on their purchases. It is a mechanism that eliminates the cascading effect of taxes, which was prevalent under the previous tax regime. Under GST, businesses can claim ITC for the taxes paid on goods or services that are used for business purposes.
Input Tax Credit (ITC) is one of the most significant benefits of the Goods and Services Tax (GST) system. Under the previous tax regime, businesses were unable to claim credit for the taxes they had paid on their purchases, The introduction of ITC under GST has simplified the tax system and provided a range of benefits to businesses.
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Benefits of Input Tax Credit
The primary benefit of ITC is that it helps reduce the overall tax burden on businesses. By allowing businesses to claim credit for the taxes paid on their purchases, ITC helps eliminate the cascading effect of taxes. This means that businesses only pay tax on the value they add to the product or service they provide, and not on the taxes paid on their purchases. This reduces the overall tax burden on businesses and helps them save money.
Another benefit of ITC is that it promotes compliance with the tax system. Under the GST system, businesses can only claim ITC if their suppliers have correctly paid the taxes on their supplies. This creates a chain of compliance, where businesses need to ensure that their suppliers have paid their taxes correctly to claim ITC. This promotes compliance with the tax system, as businesses need to keep accurate records of their purchases and ensure that their suppliers are GST compliant. This helps in creating a more transparent and efficient tax system, which is beneficial for businesses and the economy as a whole.
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How to Check Input Tax Credit on the GST Portal?
The GST Portal offers a convenient and efficient way to check the status of ITC and apply for ITC credits. It helps businesses save time and money, allowing them to focus on running their business.
Now that we have a basic understanding of ITC let’s look at the steps to check ITC on the GST portal:
Step 1: Login to the GST Portal
The first step to check ITC on the GST portal is to log in to the portal using your credentials. You can do this by visiting the GST portal and entering your login details.
Step 2: Go to the ‘Services’ Section
Once you have logged in to the GST portal, you need to go to the ‘Services’ section. This can be found on the top menu bar of the portal.
Step 3: Click on ‘Returns’
In the Services section, you will find the ‘Returns’ option. Click on this option to proceed.
Step 4: Select the Appropriate Return
Once you have clicked on ‘Returns,’ you will be presented with a list of return options. Depending on the type of business you have, you will need to select the appropriate return. For example, if you are a regular taxpayer, you will need to select GSTR-3B.
Step 5: Choose the Appropriate Financial Year and Month
After selecting the appropriate return, you will need to choose the appropriate financial year and month for which you want to check ITC.
Step 6: Click on ‘Search’
Once you have selected the appropriate financial year and month, click on ‘Search.’ The portal will display the return for the selected period.
Step 7: Check the ITC Summary
In the return, you will find a section called ‘ITC Summary.’ This section will display the total amount of ITC available for the period you have selected. You can check the ITC available under various heads such as IGST, CGST, and SGST.
Step 8: Verify the Details
After checking the ITC summary, you need to verify the details. Make sure that the ITC available is correct and matches the taxes paid on your purchases. If you find any discrepancies, you need to rectify them before filing your return.
Conclusion
In conclusion, checking Input Tax Credit (ITC) on the GST portal is an essential aspect of GST compliance for businesses. The process of checking ITC on the portal is straightforward, and businesses can do it easily by following above mentioned steps. By regularly checking ITC on the GST portal, businesses can ensure that they are claiming the correct amount of credit and are taking advantage of all the credits available to them.
Moreover, maintaining accurate financial records is crucial, and regularly checking ITC can help businesses keep their records up to date. This can help them avoid any discrepancies and ensure that their financial statements are accurate. Therefore, businesses should make it a regular practice to check ITC on the GST portal and stay on top of their compliance requirements.
