Input tax credit guide for e-commerce sellers
Input tax credit is real money back on your purchases. Here's how to claim every rupee you're entitled to — and avoid the blocks.
Input Tax Credit (ITC) lets you offset the GST you pay on business purchases against the GST you collect on sales. For sellers with real input costs — stock, packaging, ads, software, imports — ITC materially improves margins.
The GSTR-2B match
You can claim ITC only for invoices that appear in your auto-generated GSTR-2B (which reflects what your suppliers filed). If a supplier hasn't filed, the credit won't show and you can't claim it yet.
Common ITC sources for sellers
- GST on inventory purchases from suppliers.
- Import IGST on goods you import.
- GST on packaging, logistics and software.
- GST on advertising (Google, Meta, marketplace ads).
Where ITC is blocked
- Purchases used for personal, not business, purposes.
- Certain blocked categories under Section 17(5).
- Invoices missing from GSTR-2B.
- Goods/services where you opted for composition.
Maximising ITC
- Always get a proper tax invoice with your GSTIN.
- Reconcile purchases to GSTR-2B monthly.
- Chase suppliers whose invoices don't appear.
- Claim import IGST via your Bill of Entry.
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What is input tax credit?
It's the GST you paid on business purchases, which you offset against the GST you collected on sales when filing GSTR-3B.
Why can't I see some credit?
ITC only appears once your supplier files their return and it reflects in your GSTR-2B. Unfiled supplier invoices block the credit.
Can I claim ITC on ads and software?
Yes, when used for business and properly invoiced to your GSTIN — including marketplace and platform ads.
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