Input Tax Credit and Input Service Distributor

Introduction and Context

Input tax credit (ITC) is the mechanism through which GST taxes business inputs and value addition rather than repeatedly taxing the same value. A registered person generally pays GST on taxable outward supplies after reducing eligible credit of GST paid on inward supplies. ITC is therefore both a tax benefit and a controlled statutory entitlement.

The entitlement is not automatic. It depends on the nature and use of the inward supply, possession of prescribed documents, receipt of goods or services, tax payment to the Government, filing compliance, payment to suppliers, and the absence of statutory restrictions. Incorrect credit can result in tax, interest, penalty, and reputational exposure.

An Input Service Distributor (ISD) is a specialised mechanism for distributing eligible input-service credit received at a central office or other registered establishment to recipient registrations. ISD distribution must be distinguished from cross-charge, under which one distinct person supplies services to another distinct person, usually by accounting for internally provided services.

This chapter is based on the Indian GST framework, principally the Central Goods and Services Tax Act, 2017 (CGST Act), the corresponding State or Union Territory GST legislation, the Integrated Goods and Services Tax Act, 2017 (IGST Act), and the CGST Rules. GST provisions are periodically amended; professional practice must therefore verify the law, notifications, circulars, forms, and portal functionality applicable to the relevant tax period.

Learning Objectives

After studying this chapter, the learner should be able to:

1. Explain the statutory conditions for claiming ITC.
2. Evaluate documents, time limits, supplier compliance, and reconciliation evidence.
3. Identify blocked credits and distinguish them from eligible business credits.
4. Apply apportionment and reversal rules for exempt supplies and non-business use.
5. Explain special rules for capital goods, job work, and business reorganisations.
6. Distinguish ISD distribution from cross-charge and select an appropriate structure.
7. Design practical controls for credit review, reconciliation, reversal, and recovery.
8. Analyse a business case involving common services, branches, blocked credit, and disputed invoices.

1. Conceptual Foundation: What ITC Does

GST is designed to allow credit for tax incurred in making taxable supplies, subject to statutory safeguards. The basic commercial relationship may be represented as follows:

Output tax liability means GST payable on outward taxable supplies for the period. Eligible ITC means credit legally available and claimed in the prescribed return. The relationship does not authorise a taxpayer to deduct every tax invoice received: eligibility, documentation, timing, use, and restrictions must first be tested.

ITC is generally available to a registered person for goods or services used or intended to be used in the course or furtherance of business. The phrase “business purpose” is broad, but it does not override express exclusions such as blocked credits, personal consumption, or supplies used for exempt activities.

Important distinctions

2. Conditions for Availing ITC

The principal conditions under section 16 of the CGST Act should be applied as a cumulative compliance checklist.

2.1 Registration and business use

The claimant must be a registered person, and the goods or services must be used or intended for use in the course or furtherance of business. A supply acquired partly for business and partly for private use is not wholly creditable. The business-use portion may be eligible, while the private-use portion is excluded or reversed under the applicable rules.

2.2 Possession of prescribed documents

Credit normally requires a valid tax invoice, debit note, bill of entry for imports, or another prescribed document. The document should contain accurate supplier and recipient GSTINs, invoice number and date, taxable value, tax rate and amount, place-of-supply details where relevant, and a description sufficient to establish the supply.

A document containing a clerical error should not be treated casually. The taxpayer should assess whether the error prevents identification of the supplier, recipient, supply, or tax amount and should seek a corrected document where necessary.

2.3 Receipt of goods or services

The recipient must receive the goods or services. Receipt may be evidenced by goods receipt notes, delivery records, service-entry sheets, contracts, completion certificates, email approvals, usage records, or other reliable evidence. For certain arrangements involving delivery to another person on the recipient’s direction, the statutory deeming rules may treat the goods as received.

For services, receipt is often demonstrated through deliverables, attendance records, reports, access logs, work orders, or evidence of performance. Mere booking of an invoice is weak evidence.

2.4 Tax charged and paid to the Government

The tax charged by the supplier must be paid to the Government, directly or through utilisation of eligible ITC, and the supplier must furnish the relevant return. The recipient should monitor supplier filing and invoice reflection through available GST system records. Portal reflection is valuable evidence, but it does not replace the underlying invoice, receipt, and business-use tests.

2.5 Return filing and time limit

ITC must be claimed within the statutory time limit applicable to the relevant financial year and subsequent return or annual-return milestone, as amended from time to time. A professional should never rely on an old time-limit summary without checking the law applicable to the period under review.

2.6 Payment to supplier within the prescribed period

Where the recipient fails to pay the supplier the value of supply plus tax within the prescribed period—traditionally 180 days from the invoice date—the amount of credit attributable to that unpaid supply is required to be added to output tax liability or otherwise reversed in the prescribed manner, together with applicable interest. Credit may generally be re-availed after payment, subject to the law and procedural requirements.

This rule requires an accounts-payable report linking invoices, payments, credit notes, advances, and disputed balances. It should not be applied mechanically to balances that are not consideration for the supply, such as certain statutory deductions or agreed adjustments, without legal analysis.

2.7 No double benefit

Credit cannot be claimed twice for the same tax. Credit notes, debit notes, discounts, cancellations, returns, credit transfers in a business reorganisation, and corrections must be tracked to prevent duplication.

3. Documentation and Reconciliation

ITC governance is a three-way or four-way reconciliation exercise. The taxpayer should compare:

1. Purchase register and accounting records;
2. Tax invoices and debit notes;
3. Supplier-reported details and the system-generated statement, such as GSTR-2B; and
4. The ITC actually reported in the relevant GST return.

The objective is not merely to match invoice numbers. It is to establish that the tax is legally creditable, relates to the claimant, was received, was correctly reported, and has not been claimed elsewhere.

Common reconciliation exceptions

A robust reconciliation file contains the invoice, purchase order, receipt evidence, tax classification, eligibility decision, supplier status, exception resolution, approval, and return reference. Automated matching is useful, but a match does not prove business use or defeat a blocked-credit rule.

4. Blocked Credits

Section 17(5) blocks specified credits notwithstanding the general business-use rule. The list includes, subject to statutory exceptions and amendments, several categories of motor vehicles and conveyances; vessels and aircraft in specified circumstances; related insurance, servicing, repair, and maintenance; food, beverages, club memberships, beauty treatment, health services, cosmetic and plastic surgery; certain life and health insurance; employee vacation travel benefits; works contract services and goods or services used for construction of immovable property on the taxpayer’s own account; supplies received under composition taxation; goods or services used for personal consumption; goods lost, stolen, destroyed, written off, or disposed of by way of gift or free samples; and tax paid under specified penal or confiscatory circumstances.

The provision contains important exceptions. For example, motor-vehicle credit may be available where the vehicle is used for specified taxable outward supplies such as further supply, passenger transportation, or training. Food or health-related credits may be available where provision is obligatory under law or forms an element of a taxable composite or mixed supply, subject to the exact statutory language.

“Construction” and “plant and machinery” require careful interpretation. Civil structures, foundations, land, and capitalised construction are not automatically equivalent to qualifying plant and machinery. Credit should be analysed invoice by invoice, with contracts, asset registers, engineering descriptions, and judicial or administrative guidance where relevant.

Illustrative classification

A company buys a passenger car for the private use of its finance director. Credit is blocked. If the same company is in the business of supplying passenger transportation and uses qualifying vehicles for that outward supply, the result may differ. The invoice alone does not determine the answer; the business model and statutory exception do.

5. Apportionment and Reversal

A registered person may use inputs or input services for taxable supplies, exempt supplies, and non-business purposes. Credit must then be apportioned. The detailed formulae are prescribed principally in section 17 and rules 42 and 43, subject to amendments and special provisions.

For common inputs and input services, the conceptual structure is:

where the taxable-turnover ratio is generally based on taxable turnover, including zero-rated supplies where applicable, divided by the relevant total turnover. The statutory rules also identify specific exclusions and special treatments; therefore this simplified expression is explanatory, not a substitute for rule 42 computation.

A more complete conceptual allocation is:

Here, T is total ITC for the period, T₁ is credit attributable exclusively to non-business use, T₂ is credit attributable exclusively to exempt supplies, T₃ is blocked credit, T₄ is credit attributable exclusively to taxable or zero-rated supplies, and C is common credit requiring further apportionment. The labels and exact components must be aligned with the statutory rule and return format.

For capital goods used commonly, rule 43 applies a prescribed useful-life method, traditionally based on a five-year useful life and monthly attribution. The practitioner must use the statutory formula and values for the relevant period rather than inventing an accounting depreciation method.

Worked example: simplified common-service allocation

An entity has common input-service ITC of ₹100,000 for a month. Taxable and zero-rated turnover is ₹800,000, while total relevant turnover is ₹1,000,000. Ignoring statutory exclusions and assuming the simplified ratio is applicable:

The ₹20,000 is a teaching illustration. Actual GST computation must apply the prescribed rule, including turnover definitions, period adjustments, annual finalisation, and treatment of exempt and non-business credits.

Reversal calculations should be documented monthly or periodically, followed by annual adjustment where required. An annual review is essential because provisional ratios may differ from final annual turnover.

6. Capital Goods

Capital goods are goods capitalised in the books of account and used or intended for business, subject to statutory definitions. Credit is generally taken on the tax component subject to eligibility and restrictions. The same tax component should not also be claimed as part of depreciation under the Income-tax Act; this is a fundamental anti-double-benefit rule.

Capital-goods controls should include:

• asset description and serial number;
• invoice and receipt date;
• location and GST registration using the asset;
• capitalisation record;
• tax component and credit claimed;
• business, exempt, and non-business use;
• transfer, sale, destruction, or disposal history; and
• reversal or tax payment required on later events.

When capital goods are sold, the taxpayer must examine the statutory mechanism requiring payment of an amount linked to the reduced value of the credit or the applicable tax on the transaction, whichever is prescribed as higher. This is a specialised calculation and should be checked against the law in force on the date of disposal.

7. Job Work

Job work is processing or treatment of goods belonging to another registered person. The principal may send inputs or capital goods to a job worker without payment of tax, subject to documentation, time limits, and reporting requirements. The principal can generally claim ITC on inputs and capital goods sent for job work, even where the goods are sent directly to the job worker, if statutory conditions are satisfied.

Important controls include delivery challans, e-way bills where applicable, job-work registers, acknowledgement by the job worker, return or supply from the job worker’s premises, wastage and scrap records, and monitoring of statutory time limits. Failure to receive inputs or capital goods within the prescribed period may trigger a deemed supply and tax consequences, subject to the specific law and extensions.

The principal should distinguish:

• job work, where goods belonging to the principal are processed;
• a purchase of goods or services from a vendor; and
• a service supplied by one GST registration to another.

The classification affects documentation, ITC, valuation, and reporting.

8. ISD: Purpose and Statutory Mechanism

A business with several GST registrations may receive common input services—such as audit, software, legal, advertising, or corporate insurance—at one office. An ISD registration enables the eligible input-service credit to be distributed to the registrations that use or benefit from those services.

ISD is concerned with input services, not ordinary input goods or capital goods. The ISD receives invoices for common services and distributes eligible credit through prescribed documentation and returns. It does not itself create a taxable supply merely by distributing credit.

Distribution principles

The distribution framework generally follows these principles:

1. Credit attributable exclusively to one recipient is distributed only to that recipient.
2. Credit attributable to more than one recipient is distributed among those recipients.
3. Common credit attributable to all recipients is distributed among all eligible recipients.
4. Distribution is made using the prescribed ratio, commonly based on turnover in the relevant State or Union Territory in the preceding financial year, or the relevant period where the law so provides.
5. The type of tax distributed must comply with the statutory IGST, CGST, and SGST distribution rules.
6. Distribution requires an ISD document, correct recipient GSTIN, accurate tax amount, and corresponding accounting and return entries.

A practical conceptual ratio is:

This equation is a simplified representation. The taxpayer must apply the statutory definition of turnover, recipient population, period, rounding, and tax-type treatment.

ISD example

A common legal-service invoice carries eligible ITC of ₹60,000. Three registrations have relevant turnover of ₹2 crore, ₹1 crore, and ₹3 crore. Assuming the statutory turnover method applies and all three are eligible:

• Registration A: ₹60,000 × 2/6 = ₹20,000
• Registration B: ₹60,000 × 1/6 = ₹10,000
• Registration C: ₹60,000 × 3/6 = ₹30,000

The total distributed credit is ₹60,000. If the invoice relates exclusively to Registration B, the entire eligible amount is allocated to B rather than using the common ratio.

An ISD must not distribute blocked or ineligible credit. It must maintain an invoice-to-recipient matrix showing the service, benefit, recipient, tax type, allocation basis, and approval.

9. ISD and Cross-Charge: The Central Distinction

Separate GST registrations of the same legal entity in different States are treated as distinct persons. A head office and branch may therefore have a taxable supply relationship. This creates the cross-charge question.

ISD

ISD distributes credit of input services received by the ISD registration. It is a statutory credit-allocation mechanism. It is appropriate where the objective is to pass eligible common input-service credit to recipient registrations.

Cross-charge

Cross-charge treats a service supplied by one distinct person to another as a taxable outward supply. Examples may include centralised management, human resources, information technology support, or a service actually performed by the head office for branches. The supplier issues a tax invoice, determines place of supply, values the service under the valuation rules, charges GST, and reports the transaction.

Decision framework

The choice should not be based solely on convenience. It should reflect the transaction, statutory provisions, valuation rules, documentation, and available credit at the recipient. Taxpayers should monitor judicial decisions and official clarifications because cross-charge and allocation of employee-related functions have generated significant litigation and policy discussion.

10. Controls and Technology

A professional ITC control system should combine tax rules, accounting data, procurement records, and supplier compliance. Useful controls include:

• GSTIN validation at vendor onboarding;
• purchase-order tax classification;
• automated duplicate detection;
• invoice-to-GSTR-2B reconciliation;
• blocked-credit rule libraries;
• workflow approval for exceptions;
• ageing reports for unpaid invoices;
• separate ledgers for eligible, provisional, reversed, and disputed credit;
• annual turnover-based true-up;
• ISD allocation matrices; and
• audit trails for every manual override.

Artificial intelligence and machine learning can identify duplicate invoices, unusual tax rates, recurring supplier omissions, and abnormal credit patterns. They cannot lawfully decide business purpose without reliable contextual data. Human review remains necessary for blocked-credit exceptions, construction classification, job-work status, cross-charge, litigation positions, and related-party valuation.

Data governance is critical. Tax teams should restrict access, preserve invoice and return records for the statutory retention period, document model assumptions, and prevent automated systems from silently changing tax positions. A dashboard should distinguish “matched” from “eligible”; these are different concepts.

11. Illustrative Case Study: Meridian Appliances Limited

The following is a fictional illustrative case for academic application.

Background

Meridian Appliances Limited has registrations in Maharashtra, Karnataka, and Gujarat. Its Mumbai corporate office receives invoices for enterprise software, statutory audit, advertising, and group insurance. It also owns a passenger vehicle used by senior management, sends components to job workers, and provides central IT support to branches.

During a quarterly review, the company finds:

• ₹240,000 of software ITC shown in the purchase register but not in the system statement;
• an audit invoice addressed to the Mumbai GSTIN but relating to all three registrations;
• a passenger-car invoice claimed as ITC;
• components sent to a job worker without a monitored return date;
• unpaid vendor invoices older than 180 days; and
• monthly management charges from Mumbai to the branches without tax invoices.

Analysis

The software credit is not accepted merely because it appears in the accounts. Meridian should obtain supplier filing confirmation, verify the invoice and receipt, monitor system reflection, and claim only when statutory conditions are satisfied within the time limit.

The audit invoice is an input service. Meridian should determine whether Mumbai is an ISD, whether the service is common or recipient-specific, and whether the tax is eligible. If distribution is appropriate, an ISD document and prescribed turnover allocation should be used.

The passenger-car credit is presumptively blocked unless the company can establish a statutory exception, such as qualifying use in passenger transportation or another specified activity. Management convenience is not such an exception.

For job work, the company should trace the delivery challan, goods movement, job-worker acknowledgement, processing records, and statutory time limit. An exception report should be escalated before a deemed-supply consequence arises.

For unpaid invoices, accounts payable and GST teams should identify amounts subject to the payment rule, reverse the relevant credit with applicable interest where required, and re-avail it after payment if legally permitted.

Finally, the management charges may represent cross-chargeable services between distinct persons. Meridian should identify what service Mumbai performs, determine valuation and place-of-supply consequences, issue tax invoices where required, and assess recipient credit. It should not assume that an internal journal entry is sufficient.

Outcome and learning points

Meridian establishes a monthly ITC committee, introduces supplier and invoice exception reports, registers the appropriate ISD arrangement, blocks the car credit, creates a job-work register, and separates employee-function costs from identifiable inter-registration services. The case demonstrates that ITC is an end-to-end control process rather than a bookkeeping deduction.

12. Challenges, Limitations, and Regulatory Risk

The principal challenges are changing statutory deadlines, incomplete supplier reporting, inconsistent master data, complex common-service allocation, ambiguity in business-purpose evidence, valuation disputes, and differences between accounting treatment and GST treatment. A taxpayer may have commercially genuine expenditure but still lack credit because the law blocks it or a condition is unmet.

Professional judgment is particularly important in:

• construction and plant-and-machinery classification;
• mixed-use expenditure;
• employee benefits and mandatory facilities;
• transactions between distinct persons;
• branch and head-office functions;
• credit notes and retrospective amendments; and
• credits appearing in system statements but unsupported by documents.

A defensible position contains a legal basis, factual evidence, computation, approval, and a plan for correction if later facts change. Aggressive credit claims should be evaluated for interest, penalty, audit, litigation, and disclosure consequences.

13. Best-Practice Compliance Framework

A mature organisation can use the following cycle:

1. Capture: collect invoices, debit notes, bills of entry, receipt evidence, and contracts.
2. Classify: identify goods, services, capital goods, job work, imports, ISD items, and cross-charge items.
3. Screen: test business use, blocked-credit provisions, exempt use, and personal use.
4. Reconcile: compare books, documents, supplier data, system statements, and returns.
5. Approve: require tax-owner approval for exceptions and judgemental positions.
6. Claim or defer: claim eligible credit within time; defer unsupported credit.
7. Reverse: process payment-rule, exempt-use, capital-goods, credit-note, and other reversals.
8. Distribute or charge: use ISD for qualifying credit distribution and cross-charge for actual inter-registration supplies.
9. Review: perform monthly exception review and annual true-up.
10. Preserve: retain records, working papers, reconciliations, and audit trails.

This framework links legal entitlement with operational evidence and managerial accountability.

Chapter Summary

ITC is a conditional statutory entitlement that reduces GST payable on eligible business inputs and services. The claimant must satisfy registration, document, receipt, supplier-payment, return-filing, time-limit, and anti-double-benefit requirements. Business use alone does not overcome blocked credits under section 17(5).

Common credits must be apportioned between taxable, zero-rated, exempt, business, and non-business use using the prescribed rules. Capital goods, job work, payment defaults, credit notes, disposal, and annual turnover adjustments require specific controls. Reconciliation with supplier data and GSTR-2B is important but does not replace legal eligibility analysis.

ISD distributes eligible input-service credit to recipient registrations according to statutory attribution and allocation rules. Cross-charge is different: it concerns a taxable supply of services between distinct persons. Correct classification, valuation, documentation, and recipient-credit analysis are essential. Technology can improve matching and exception detection, but professional judgment and governance remain indispensable.

Key Terms

ITC: Input tax credit available for eligible inward supplies.

Input: Goods, other than capital goods, used or intended for business.

Input service: Service used or intended for business.

Capital goods: Business goods capitalised in the books and treated under the GST framework.

Blocked credit: Credit expressly denied by statute.

Exempt supply: Supply attracting nil rate or wholly exempt from tax, including specified non-taxable treatment.

Zero-rated supply: Export or supply to a special economic zone under the IGST framework.

Common credit: Credit not attributable exclusively to a particular use or recipient.

Apportionment: Allocation of credit between eligible and ineligible uses.

Reversal: Reduction or repayment of credit previously claimed.

ISD: Input Service Distributor registered to distribute eligible input-service credit.

Cross-charge: Taxable supply between distinct GST registrations of the same legal entity.

Distinct persons: Separate registrations treated as separate persons under GST.

GSTR-2B: System-generated statement used as an input for ITC reconciliation.

Job work: Processing or treatment of goods belonging to another registered person.

Bill of entry: Customs document supporting import-related ITC, where applicable.

Business purpose: Use in the course or furtherance of business.

Turnover ratio: Prescribed proportion used for allocating common credit.

Supplier compliance: Supplier’s filing and tax-payment behaviour relevant to recipient credit.

True-up: Final adjustment after comparing provisional and final eligible amounts.

Review Questions

Short Answer Questions

1. State four principal conditions for claiming ITC.
2. What is meant by blocked credit?
3. Why is GSTR-2B reconciliation not by itself proof of eligibility?
4. Distinguish an input service from a capital good.
5. What is the purpose of an ISD registration?

Long Answer Questions

1. Explain the statutory and documentary framework for claiming ITC under GST.
2. Discuss blocked credits and the importance of statutory exceptions.
3. Explain apportionment and reversal for common inputs and input services.
4. Describe the treatment and control requirements for goods sent for job work.
5. Compare ISD distribution and cross-charge, including their documentation and compliance implications.

Analytical / Application Questions

1. A company receives common legal-service invoices at its head office for three State registrations. Explain how it should determine eligibility, choose an allocation mechanism, document the distribution, and reconcile the recipient credits.
2. An entity claims ITC on a passenger vehicle, employee health insurance, and construction material used in an office building. Analyse each item, identify possible exceptions, and specify the evidence required.
3. A supplier’s invoice appears in the accounting system but not in the system-generated statement, while the recipient has received the service and paid the supplier. Design a controlled decision process for claiming, deferring, monitoring, and correcting the credit.

Multiple Choice Questions with Answers

Question 1

Which combination best describes the principal requirements for ordinary ITC entitlement?

A. Business use, prescribed document, receipt, and satisfaction of statutory conditions

B. Only payment of the invoice by the recipient

C. Only appearance of the invoice in GSTR-2B

D. Only capitalisation of the expenditure

Correct Answer: A. Business use, prescribed document, receipt, and satisfaction of statutory conditions

Question 2

A passenger vehicle is purchased for the private use of a company director. What is the usual GST treatment?

A. Full ITC is available because the company paid GST

B. ITC is generally blocked, absent a statutory exception

C. ITC is available only if the vehicle is depreciated

D. ITC is automatically distributed through the ISD

Correct Answer: B. ITC is generally blocked, absent a statutory exception

Question 3

What does an ISD primarily distribute?

A. Eligible input-service credit

B. Output tax on sales of goods

C. Income-tax depreciation

D. Customs duty on all imports

Correct Answer: A. Eligible input-service credit

Question 4

A common input-service credit of ₹60,000 is allocated among three eligible registrations with relevant turnovers of ₹2 crore, ₹1 crore, and ₹3 crore. Under the stated proportional assumption, what amount goes to the second registration?

A. ₹5,000

B. ₹10,000

C. ₹20,000

D. ₹30,000

Correct Answer: B. ₹10,000

Question 5

Which statement correctly distinguishes cross-charge from ISD?

A. Cross-charge concerns a taxable supply between distinct persons; ISD distributes eligible input-service credit

B. ISD applies only to output goods, while cross-charge applies only to imports

C. Both are identical names for the same statutory process

D. Cross-charge never requires valuation or documentation

Correct Answer: A. Cross-charge concerns a taxable supply between distinct persons; ISD distributes eligible input-service credit

Question 6

Why must a taxpayer monitor payment to suppliers?

A. Failure to pay within the prescribed period can require reversal or addition relating to the credit

B. Payment determines the supplier’s income-tax rate only

C. Payment eliminates all blocked-credit restrictions

D. Payment makes an incorrect GSTIN immaterial

Correct Answer: A. Failure to pay within the prescribed period can require reversal or addition relating to the credit

Question 7

Which record is most directly useful for controlling goods sent for job work?

A. A job-work register linked to delivery challans, movement, and return dates

B. A director’s personal expense report

C. A marketing brochure

D. A bank loan sanction letter

Correct Answer: A. A job-work register linked to delivery challans, movement, and return dates

Question 8

A credit is shown in a system-generated statement but relates to a personal expenditure. What should the recipient do?

A. Claim it because system reflection is conclusive

B. Claim it and distribute it through ISD

C. Exclude it because personal use can make the credit ineligible

D. Convert it into capital goods credit

Correct Answer: C. Exclude it because personal use can make the credit ineligible

Question 9

What is the purpose of apportionment rules for common credit?

A. To allocate credit between eligible and ineligible uses such as taxable and exempt activities

B. To increase every taxpayer’s credit by the exempt turnover

C. To replace the requirement for tax invoices

D. To determine the employee’s salary

Correct Answer: A. To allocate credit between eligible and ineligible uses such as taxable and exempt activities

Question 10

Which control best reduces duplicate ITC claims?

A. Matching invoice number, supplier GSTIN, tax amount, and accounting entry before approval

B. Accepting every invoice uploaded by a supplier without review

C. Deleting purchase-register history monthly

D. Using only the total purchase value without tax details

Correct Answer: A. Matching invoice number, supplier GSTIN, tax amount, and accounting entry before approval