How ITC works, common reasons claims get blocked, and the matching requirement with GSTR-2B.

By Kanoons Editorial Team · 6 min read · Last verified 2026-07-26

Input tax credit lets a registered business reduce its GST liability by the tax already paid on business purchases. To claim ITC, the recipient must hold a valid tax invoice, have received the goods or services, and the supplier must have actually deposited that tax with the government and reported it in their GSTR-1.

Mismatches between GSTR-2B and the ITC claimed in GSTR-3B are one of the most common triggers for a GST notice, so monthly reconciliation is worth the discipline.