Understanding the latest GST ITC rules is critical for cash flow management. This guide covers GSTR-2B reconciliation, blocked credits, and Rule 86B compliance.
Input Tax Credit (ITC) under GST remains one of the most complex and litigated areas for businesses. The 2024 amendments have introduced several changes that businesses must be aware of.
GSTR-2B Reconciliation
All ITC claims must now be reconciled with GSTR-2B on a monthly basis. Credits not appearing in GSTR-2B can only be claimed provisionally subject to supplier compliance.
Blocked Credits Under Section 17(5)
Several categories of expenses remain ineligible for ITC. These include motor vehicles for personal use, food and beverages, health services, and club memberships.
Rule 86B Compliance
Businesses with taxable turnover exceeding ₹50 lakh in a month must mandatorily pay at least 1% of their tax liability in cash, limiting ITC utilization.