Input Tax Credit (ITC) Eligibility Checker — Section 16 & 17(5)
This free tool checks whether your purchase qualifies for GST Input Tax Credit by verifying all conditions under Section 16 of the CGST Act (registration, valid invoice, receipt, supplier compliance, GSTR-2B reflection, business use) and checking against the blocked credit list under Section 17(5). Enter the GST amount, answer 6 eligibility questions, select any blocked categories — get an instant verdict with eligible ITC amount and GSTR-3B reporting guidance.
Check ITC Eligibility for Your Purchase
How to Use the ITC Eligibility Checker
This tool performs a comprehensive eligibility check for claiming Input Tax Credit on any GST purchase. It verifies all conditions under Section 16 of the CGST Act and checks against the blocked credit list under Section 17(5).
Step 1 — Enter Purchase Details
Enter the GST amount paid on the purchase and select the category (raw materials, services, capital goods, or imports). This determines any category-specific rules that apply.
Step 2 — Answer Section 16 Questions
Answer 6 Yes/No questions covering the mandatory conditions: GST registration, valid invoice, receipt of goods/services, GSTR-2B reflection, business use, and 180-day payment rule. All must be “Yes” for ITC eligibility.
Step 3 — Check Blocked Categories
Select any blocked credit categories under Section 17(5) that apply to this purchase. If any blocked category is selected, the ITC is fully disallowed regardless of Section 16 compliance.
Step 4 — View Results
Get an instant verdict showing eligible ITC amount, failed conditions (if any), blocked credit flags, and GSTR-3B reporting guidance for Table 4A.
CA Tip: Maintain a monthly ITC register categorising each purchase as eligible, blocked, or partially eligible. This makes GSTR-3B filing accurate and simplifies annual reconciliation for GSTR-9. The ICAI recommends documenting the business purpose for each capital goods ITC claim to defend during audits.
Section 16 — Conditions to Claim ITC
Under Section 16 of the CGST Act, ALL of the following conditions must be satisfied simultaneously to claim Input Tax Credit:
- GST Registration: Only a registered person under GST can claim ITC. Unregistered persons have no ITC facility.
- Valid Tax Invoice: Must possess a tax invoice, debit note, or bill of entry with all mandatory fields per Rule 46 of CGST Rules.
- Receipt of Goods/Services: Goods must be actually received (or deemed received for bill-to-ship-to). For services, the service must have been provided.
- GSTR-2B Reflection: From January 2022, ITC is linked 100% to GSTR-2B per Rule 36(4). No provisional ITC is allowed beyond GSTR-2B.
- Business Purpose: Goods/services must be used in the course or furtherance of business. Personal use items are ineligible.
- 180-Day Payment Rule: Under Rule 37, if payment is not made to supplier within 180 days, ITC must be reversed with 18% interest. ITC can be reclaimed upon payment.
Additionally, ITC must be claimed within the prescribed time limit: earlier of the GSTR-3B due date for September of the following financial year, or the date of filing GSTR-9.
Section 17(5) — Blocked Credits (Complete List)
Regardless of meeting Section 16 conditions, ITC cannot be claimed on these items under Section 17(5) of the CGST Act:
| Blocked Category | Section | Exceptions |
|---|---|---|
| Motor vehicles (seating ≤ 13 persons) | 17(5)(a) | Resale, commercial transport, driving training |
| Food, beverages, outdoor catering | 17(5)(b) | Obligatory under law, or same is outward supply |
| Beauty treatment, cosmetic surgery | 17(5)(b) | Obligatory under law, or same is outward supply |
| Health services, fitness | 17(5)(b) | Obligatory under law, or same is outward supply |
| Club/gym membership | 17(5)(b) | None |
| Life/health insurance | 17(5)(b) | Govt mandated, or same is outward supply |
| Rent-a-cab, life insurance (employees) | 17(5)(b) | Obligatory under law |
| Construction of immovable property (own) | 17(5)(d) | Plant & machinery excluded from block |
| Goods lost, stolen, destroyed, written off | 17(5)(h) | None |
| Gifts, free samples | 17(5)(h) | None |
| Goods/services for personal consumption | 17(5)(g) | None |
| Tax paid under composition scheme | 17(5)(e) | None |
Important: “Plant and machinery” is explicitly excluded from the construction block. ITC is available on plant and machinery even when installed in a building under construction. This includes pipes, electrical fittings, and equipment embedded in the building but classified as plant and machinery under GST law.
ITC Compliance Best Practices
Proper ITC management is critical for GST compliance. The ICAI and CBIC recommend these practices:
Monthly ITC Reconciliation
Download GSTR-2B on the 14th of each month and reconcile with your purchase register before filing GSTR-3B. Use the GSTR-2A vs 3B Reconciliation Tool to identify mismatches. Follow up with suppliers for missing invoices immediately.
ITC Reversal Tracking
Maintain a reversal register tracking Rule 37 (180-day non-payment), Rule 42 (exempt supply apportionment), and Rule 43 (capital goods reversal). Report reversals in GSTR-3B Table 4(B) and in GSTR-9 Table 7.
Documentation
Retain all tax invoices, debit notes, bills of entry, ISD invoices, and self-invoices for 6 years from the date of filing annual return. Ensure every invoice has a valid GSTIN, correct HSN/SAC code, and all mandatory fields under Rule 46.
Expert Tip: Create a “blocked credit checklist” for your accounts team listing all Section 17(5) categories specific to your industry. Flag these at the time of invoice booking itself — not at the time of return filing. Talk to our CA team →
Need help with ITC claims? Our CAs handle ITC reconciliation, reversal calculations, GSTR-3B filing, and respond to ITC mismatch notices across India. Talk to a CA today →
