Oops! Sorry!!

This site doesn't support Internet Explorer. Please use a modern browser like Chrome, Firefox or Edge.

Unregistered suppliers can claim Input Tax Credit


In the dynamic landscape of Goods and Services Tax (GST), unregistered suppliers often find themselves transitioning into the realm of registered entities. This metamorphosis not only brings compliance responsibilities but also opportunities for claiming Input Tax Credit (ITC) on existing stock. This guide is tailored for professionals, offering a detailed procedure, calculations, and compliance nuances for seamless ITC claims under Section 18(1)(a) of the GST Act.


Procedure for Claiming ITC

1. Timely Application for Registration (Section 18(1)(a))

  - Act promptly: Unregistered suppliers must apply for GST registration within 30 days of becoming liable.

  - Efficient processing: The registration certificate becomes effective from the liability date if the application is submitted within the stipulated 30-day window.


2. Determining Eligible ITC (Section 18(1)(a))

- Stock assessment: Identify and quantify inputs held in stock and those present in semi-finished or  finished goods on the day before becoming liable for GST payment.

  - Documentation: Maintain detailed records of eligible inputs, ensuring compliance with GST regulations.


3. Calculation of ITC:

  - Input tax on eligible stock: Calculate the input tax on the identified stock of inputs.

  - Semi-finished/finished goods: Compute the input tax pertaining to semi-finished or finished goods.


4. Filing Form GST ITC-01:

  - Accurate information: Complete Form GST ITC-01 with precision, providing details inputs, semi- finished, and finished goods.

  - Supporting documents: Attach necessary documents supporting the claim, such as invoices and stock statements.


5.  Adherence to Section 18(2):

  - Time limitation: Be aware of the one-year limitation for claiming ITC from the date of issue of the tax invoice.

  - Post-registration supplies: ITC cannot be claimed on supplies received after the expiry of one year from the tax invoice date.



Navigating the process of claiming ITC for unregistered suppliers turned GST-registered professionals demands meticulous attention to detail and compliance with relevant provisions. By submitting the registration application promptly, accurately calculating eligible ITC, and filing Form GST ITC-01 with supporting documents, professionals can maximize their ITC benefits. It is crucial to remain vigilant about Section 18(2) to avoid any inadvertent lapses in compliance, ensuring a seamless transition into the realm of registered entities.

In a landscape where GST regulations evolve, staying informed and adhering to the procedural intricacies is paramount for professionals aiming to optimize their tax credit benefits.

Sign up for my newsletter

Copyright © | Sushilgupta.com