What are the 5 mandatory conditions to claim ITC under Section 16 of CGST Act?

1. Possession of tax invoice/debit note. 2. Physical receipt of goods/services (or deemed receipt under Sec 16(2)(b)). 3. Tax actually paid to Govt by supplier. 4. Return (GSTR-3B) filed. 5. Invoice communicated in GSTR-2B via IMS.

Does 'Deemed Acceptance' guarantee legally safe ITC under audit?

No. Deemed Acceptance automatically moves unactioned bills to GSTR-2B, but if a supplier invoice turns out to be fake, duplicate, or billed to wrong GSTIN, you remain legally liable for claiming ineligible credit.

Can I claim ITC on an invoice if the supplier filed GSTR-1 late after the 13th?

If a supplier files GSTR-1 after the 13th, the invoice will populate in your next month's IMS dashboard. You can Accept it then to claim ITC in that subsequent month's GSTR-3B.

What is the statutory deadline to claim pending ITC for a financial year?

Under Section 16(4), all pending ITC for a financial year must be claimed in GSTR-3B by November 30th following the FY end (or the date of filing the Annual Return, whichever is earlier).

How to Claim ITC Using IMS (Accept, Reject & Pending Rules 2026)

Quick Summary: How Do Taxpayers Claim ITC Using the IMS Dashboard?

To claim ITC under IMS: Review incoming supplier entries on the GST portal (Services > Returns > IMS). Select 'Accept' for verified purchase bills to push tax values into your GSTR-2B eligible ITC section (Table 4A of GSTR-3B). Select 'Pending' for in-transit stock and 'Reject' for erroneous or unauthorized vendor bills.

Legal Mandate: IMS compliance is mandatory under Section 16(2)(aa) & Section 38.
Acceptance Action: Pushes invoice tax data to GSTR-2B eligible credit.
Deemed Acceptance: Default portal behavior if no action is taken by the 14th cutoff.
Nov 30 Cutoff: Statutory deadline under Section 16(4) for resolving all pending FY credits.

1. The 5 Legal Pillars of ITC Claim under Section 16

Under Section 16 of the CGST Act 2017, Input Tax Credit (ITC) is not an absolute right; it is a conditional benefit. To claim ITC legally, recipient businesses must satisfy five statutory conditions:

1. Possession of Tax Invoice

You must hold a valid tax invoice or debit note issued by a registered supplier containing complete HSN codes and GSTIN.

2. Physical Receipt of Goods/Services

Under Section 16(2)(b), physical delivery of goods or completion of service must take place before claiming ITC.

3. Tax Paid to Government

The tax charged on the invoice must actually be deposited with the government by the supplier via GSTR-3B.

4. Communication in GSTR-2B (IMS)

The invoice must populate in your IMS dashboard and be Accepted (or Deemed Accepted) into your GSTR-2B.

2. Action-by-Action Guide to Claiming ITC in IMS

Action 1: ACCEPT — Releasing ITC to GSTR-3B

Select Accept when the vendor bill matches your physical purchase voucher in Tally Prime. Once saved, the tax amount moves into GSTR-2B as eligible credit and populates Table 4A(5) of GSTR-3B.

Action 2: PENDING — Holding Credit for Goods in Transit

Select Pending when vendor bills are uploaded in GSTR-1 but goods are still in transit on the 14th of the month. This defers ITC safely to the next tax period without rejecting the bill.

Action 3: REJECT — Purging Incorrect or Unauthorized Bills

Select Reject for bills with wrong GSTINs or fake vendor entries. This excludes the bill from GSTR-2B and alerts the supplier to issue a GSTR-1A correction.

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