Input Tax Credit is the single largest lever in the GST regime, and also the most common source of avoidable loss. We routinely find businesses leaving lakhs of rupees on the table because of process gaps that take a single quarter to fix.
Mistake one: not reconciling GSTR-2B with the purchase register every month. ITC that does not appear in 2B simply cannot be claimed.
Mistake two: claiming ITC on blocked credits — motor vehicles, club memberships, employee health insurance — without checking Section 17(5).
Mistake three: paying the supplier later than 180 days and forgetting to reverse the ITC.
Mistake four: missing ITC on import IGST, RCM, and ISD distributions because they sit outside the regular purchase flow.
Mistake five: not chasing non-compliant vendors. A single defaulting supplier can cost more in lost ITC than your entire procurement saving from them.
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