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CGST Act Section 16, 17(5) & Rule 42/43

GST ITC Calculator — Input Tax Credit Calculator India

Use our free GST ITC calculator to compute eligible Input Tax Credit, account for blocked credits under Section 17(5), and determine your net GST liability payable in cash or excess credit to carry forward.

Purchase & Sales Inputs

Enter the GST paid on purchases and tax collected on sales

Inputs / Inward Supplies
₹
Presets:
Output / Outward Tax
₹
Presets:

Percentage of purchases used for taxable business supply

100%
Blocked Credit (Section 17(5))Non-Claimable

Exclude GST paid on motor cars, food, works contract, etc.

Tax & Credit Settlement

GSTR-3B Table 4 & 6.1
Net GST SettlementReady
₹ 0.00

Enter GST paid on purchases and tax collected on sales to calculate your net credit or cash liability.

GST Paid on Purchases₹ 0.00
Eligible Proportion (100%)₹ 0.00
Net ITC Claimable₹ 0.00
GST Collected on Sales₹ 0.00
Net GST Payable (Cash)₹ 0.00
⚖️ Rule 88A ITC Set-off Order

IGST credit must be completely exhausted first before utilizing CGST or SGST. CGST credit cannot be set off against SGST liability and vice versa.

What is GST Input Tax Credit (ITC) and How Does Our ITC Calculator Work?

Input Tax Credit (ITC) is the core mechanism of the Goods and Services Tax (GST) system designed to eliminate the cascading effect of taxation (tax on tax). When you purchase goods or services for your business, you pay GST to your vendor. When you sell goods or provide services to your customers, you collect GST from them.

Under GST law, you do not need to pay the entire GST collected from customers to the government. Instead, you can deduct the GST you already paid on your business purchases (ITC) from your outward tax liability and only pay the net difference to the tax department.

💡 Real-World Numerical Example:
1. Inward Purchases₹ 1,00,000 + 18% GSTITC = ₹ 18,000
2. Outward Sales₹ 1,60,000 + 18% GSTCollected = ₹ 28,800
3. Net Cash to Govt₹ 28,800 − ₹ 18,000Net Cash = ₹ 10,800

The 4 Legal Conditions to Claim ITC (Section 16(2))

To legally claim Input Tax Credit in your GSTR-3B, all four of the following statutory requirements must be fulfilled simultaneously:

1

Possession of Tax Invoice

The buyer must be in possession of a valid tax invoice, debit note, or bill of entry issued by a GST-registered supplier containing all mandatory particulars (GSTIN, HSN, tax split).

2

Receipt of Goods or Services

The taxpayer must have physically received the underlying goods or services. ITC cannot be claimed merely on advance invoices until delivery or performance is complete.

3

Tax Paid by Supplier (GSTR-2B)

Under Section 16(2)(aa), the invoice details must be reported by the supplier in their GSTR-1 / IFF and must be successfully reflected in the recipient's auto-generated Form GSTR-2B.

4

Filing of Form GSTR-3B

The registered recipient must furnish their monthly or quarterly return in Form GSTR-3B under Section 39 to officially offset or carry forward the credit.

Section 17(5) Master Table: Ineligible & Blocked Credits

Review which common business expenses are blocked under the law and the specific statutory exceptions where ITC is permitted:

Purchase CategoryITC StatusLegal Exceptions (ITC Allowed)
Motor vehicles for staff/executives (seating capacity ≤ 13)BLOCKEDAllowed if used for passenger transport business (taxi/bus), commercial driving training, or further supply (car dealership).
Food, beverages, outdoor catering, beauty & health servicesBLOCKEDAllowed if used as an inward supply for making the same category of outward taxable supply (e.g. restaurant or catering firm).
Works contract services for immovable property constructionBLOCKEDAllowed if used for construction of Plant & Machinery, or when used as input by a main construction contractor for sub-contracting.
Club membership, health club & fitness centre feesBLOCKEDNo general business exception. Blocked 100%.
Goods lost, stolen, destroyed, written off or given as free giftsBLOCKEDITC must be reversed if goods are disposed of without consideration or written off from inventory books.
Plant & Machinery, Factory Tools & Office ComputersELIGIBLEFully eligible in the same tax period provided depreciation is not claimed on the GST tax component under Income Tax Section 32.
🧮 Practical Statutory Example

Worked Example: Computing Net GST Liability & Blocked Credit

Section 16 & Section 17(5)

Consider a registered electronics retail firm in Delhi assessing their monthly GST return in Form GSTR-3B:

Gross Output GST on Sales

₹1,50,000

Tax collected from customer billings
Inward ITC in GSTR-2B

₹95,000

Includes ₹15,000 blocked car insurance
Net Cash Payable in GSTR-3B

₹70,000

Payable through Electronic Cash Ledger

Step-by-Step Set-off & Ineligible Credit Adjustment

  1. Isolate Ineligible ITC: Out of ₹95,000 total ITC reflected in GSTR-2B, ₹15,000 relates to motor car servicing and staff club memberships (ineligible under Section 17(5)). This leaves an Eligible ITC of ₹80,000.
  2. Discharge Output Liability: The eligible credit of ₹80,000 is utilized to offset output liability of ₹1,50,000 under Section 49 set-off order rules.
  3. Balance Cash Remittance: The remaining unadjusted output liability of ₹1,50,000 − ₹80,000 = ₹70,000 is deposited in cash through challan PMT-06.
  4. Return Reporting: The ₹15,000 blocked amount is reported under Table 4(B)(1) as ineligible credit reversal, ensuring the GSTR-3B return matches the GSTR-2B reconciliation statement.

Important Deadlines & The 180-Day Payment Rule

📅 Final Time Limit to Claim ITC

ITC for any invoice belonging to a financial year must be claimed no later than 30th November of the subsequent financial year, or before the date of filing the relevant Annual Return in Form GSTR-9, whichever is earlier.

⏳ 180-Day Supplier Payment Rule (Rule 37)

If a buyer fails to pay the supplier the invoice value along with GST within 180 days from the invoice issue date, the buyer is legally obligated to reverse the claimed ITC in Form GSTR-3B along with interest at 18% p.a. under Section 50.

Frequently Asked Questions

Frequently Asked Questions on GST ITC

Clear, authoritative answers to common questions about Input Tax Credit calculation, Section 16/17(5) rules, time limits, and set-off order in India.

The ITC (Input Tax Credit) Calculator works by comparing the GST you paid on business purchases (input tax) with the GST you collected on sales (output tax). First, enter your total purchase GST and outward sales GST. Next, adjust your eligible business percentage and deduct any blocked credits under Section 17(5). The calculator instantly computes your Net Eligible ITC and shows your final net GST payable in cash or excess credit to carry forward in GSTR-3B.
Net ITC is calculated by subtracting blocked or ineligible credits from your total purchase GST, and then multiplying by your eligible business proportion: Net Eligible ITC = (Total Purchase GST − Blocked Credits under Section 17(5)) × (Eligible Business Use % / 100). If you paid GST under Reverse Charge (RCM), that amount is added to eligible ITC. Finally, if Output Tax exceeds Net Eligible ITC, the difference is your Net GST Payable; if Net Eligible ITC exceeds Output Tax, the balance is carried forward.
Under Section 16(4) of the CGST Act (amended via Finance Act 2022), the deadline to claim ITC for any invoice or debit note pertaining to a financial year is 30th November of the following financial year, or the actual date of filing the annual return (Form GSTR-9), whichever is earlier. Furthermore, under Section 16(2)(aa), the invoice must appear in your GSTR-2B, and under Rule 37, you must pay the supplier within 180 days from the invoice date.
Under Section 49, 49A, 49B and Rule 88A of the CGST Rules, the statutory order of set-off is: (1) IGST credit must be fully exhausted first against IGST liability, and any remaining IGST credit can be set off against CGST and SGST/UTGST in any proportion; (2) CGST credit is then used to pay CGST liability, and any remaining balance can pay IGST liability (never SGST); (3) SGST/UTGST credit is used to pay SGST/UTGST liability, and any balance can pay IGST liability (never CGST).
Generally, no. Under Section 17(5)(a) of the CGST Act, ITC on motor vehicles with seating capacity up to 13 persons (including driver) is blocked, even if purchased in the company name. ITC is allowed only if the vehicle is used for: (1) further supply of such vehicles (car dealers), (2) passenger transportation services (taxi operators, commercial fleets), or (3) imparting driving training (driving schools). Commercial goods transport vehicles and vehicles with seating capacity over 13 persons are eligible for ITC.
This calculator is designed for GST-registered business owners, MSMEs, finance managers, Chartered Accountants (CAs), tax consultants, and e-commerce sellers. It provides quick, error-free computation of eligible ITC, helps prevent invalid claims of blocked credits under Section 17(5), and assists in accurate monthly GSTR-3B return filing and working capital management.
No, absolutely not. The ITC Calculator on My GST Calc is 100% free, unlimited, and requires no registration, login, email, or account creation. All computations are performed client-side directly within your browser with complete privacy—no financial data is ever stored or transmitted to our servers.

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⚠️ Disclaimer: Input Tax Credit calculations provided by My GST Calc are for estimation, planning, and educational purposes under the Central Goods and Services Tax Act, 2017. Actual eligibility depends on supplier GSTR-2B reflection and statutory return compliance. Please verify with your Chartered Accountant or tax advisor prior to filing Form GSTR-3B.