GST Input Tax Credit (ITC) & Net Tax Payable Calculator 2026

Input Tax Credit (ITC) allows businesses to reduce the GST paid on purchases (inputs) from the GST collected on sales (outputs), paying only the net balance to the government.

According to GST rules: IGST credit must be utilized first against IGST, then CGST/SGST. CGST credit cannot be set off against SGST, and SGST credit cannot be set off against CGST.

Section 17(5) blocks ITC even when GST was properly paid. The main heads: motor vehicles seating up to 13 people, unless you deal in vehicles or run passenger transport or a driving school; food and beverages, outdoor catering, health services and beauty treatment; club and fitness centre membership; construction of immovable property on your own account; and anything used for personal purposes. A Rs 20 lakh company car at 18% means Rs 3.6 lakh of GST you simply cannot claim.

The provisos to Section 49(5) forbid it: CGST credit may discharge CGST and then IGST, but never SGST, and SGST credit may discharge SGST and then IGST, but never CGST. CGST is the Centre's revenue and SGST is the state's, so allowing a cross set-off would move money between two governments. If you hold Rs 50,000 of CGST credit but owe Rs 50,000 of SGST, you must pay that SGST in cash while the CGST credit sits in the ledger.

Section 16(4) allows ITC until 30 November following the end of the financial year, or the date of filing the annual return, whichever is earlier. For an invoice dated May 2026 in FY 2026-27, the last chance is the GSTR-3B for October 2026, filed by 20 November 2026. Miss it and the credit lapses permanently — there is no condonation, which is why monthly GSTR-2B reconciliation matters more than a year-end clean-up.

The second proviso to Section 16(2) requires you to reverse the ITC, with 18% interest, if the invoice value plus tax is not paid within 180 days of the invoice date. On a Rs 5,00,000 purchase with Rs 90,000 of ITC at 18%, delaying payment past 180 days means adding Rs 90,000 back to your output liability. You re-claim the credit in the month you finally pay, but the interest is not refunded.

No. Section 16(2)(aa) makes ITC available only for invoices your supplier has reported in GSTR-1 and that appear in your auto-generated GSTR-2B. Holding a valid tax invoice is not enough — if the supplier has not filed, the credit does not exist for you. Reconcile your purchase register against GSTR-2B every month and chase non-filing suppliers before the Section 16(4) deadline closes.