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GST ITC 01: Step-by-Step Guide to Claim ITC on New GST Registration

By Taxscan Team - On July 26, 2021 12:21 pm

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.

According to Section 18(1) of the CGST Act 2017, the registered person can claim an input tax credit by filing declaration form GST ITC-01. For inputs in stock as finished, semi-finished or capital goods, the credits can be availed:

• For once in a lifetime of the taxpayer, the day before the date of registration, it can be claimed according to Clause (a) or clause(b) of sub-section(1) of Section 18.
• During a financial year, the day before the day from when the taxpayer is liable to pay tax under Section 9, to claim according to Clause(c) of sub-section (1) of Section 18.
• Claims made according to Clause (d) of sub-section (1) of Section 18, all supplies claimed by a registered taxpayer from a day before the date are taxable.

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.

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