Input Tax Credit (ITC) is a vital feature of the GST system, allowing businesses to reduce tax liability by claiming credit for taxes paid on purchases. With GST 2.0 in 2025, claiming ITC has become more streamlined and automated. This guide explains how businesses can claim ITC under GST 2.0 step by step.

Step 1: Ensure Eligibility for ITC

Businesses can claim ITC if:

• They are registered under GST 2.0
• Goods/services purchased are used for business purposes
• They have a valid tax invoice from the supplier
• Goods/services have been received and recorded in books of accounts

Step 2: Match Supplier and Purchaser Details

GST 2.0 automatically matches invoices uploaded by suppliers. Businesses should ensure:

• GSTIN of supplier and recipient is correct
• Invoice details match the purchase records
• Tax amount and HSN/SAC codes are accurate

Step 3: File ITC in GST Return

ITC is claimed while filing returns on the GST portal:

• Login to the GST portal with valid credentials
• Go to 'Services' → 'Returns' → 'File Return'
• Enter ITC details in the appropriate fields
• Submit and verify before filing the return

Step 4: Verification and Auto-Approval

GST 2.0 uses automation and AI for verification:

• Cross-checks ITC with supplier invoices
• Identifies mismatches and sends notifications for corrections
• Approves ITC claims automatically if records match

Step 5: Adjust ITC Against GST Liability

Once approved, ITC can be adjusted against the tax payable on outward supplies. This reduces the actual cash outflow for GST payments.

Key Tips for Smooth ITC Claims

• Maintain accurate and timely purchase records
• Ensure supplier invoices are uploaded on GST portal
• Respond promptly to mismatch notifications
• Use accounting software integrated with GST 2.0 for automation

Conclusion

Claiming Input Tax Credit under GST 2.0 is now faster and more reliable. By following these steps and ensuring proper documentation, businesses can maximize ITC claims, reduce GST liability, and stay compliant in 2025 and beyond.