Input tax credit is the heart of GST: the tax you pay on purchases offsets the tax you collect on sales, so you only pay tax on the value you add. But ITC is not automatic. It depends on a chain of small things being right — the invoice, the supplier's return, your return, and the timing. Break one link and the credit stops, even though the money genuinely left your bank account. Worse, many breaks are discovered months later, during a reconciliation or a notice, when fixing them is far harder. The ten mistakes below are the ones accountants see again and again in small businesses, each with its fix. GST rules change from time to time, so verify the current provisions before acting on a large amount.
Quick answer: The most common ITC-blockers are a wrong GSTIN on the invoice, a purchase missing from GSTR-2B, an unpaid invoice past 180 days, and a missed claim deadline. Fix most invoice errors with a credit note plus a corrected invoice from the supplier, and reconcile 2B every month instead of at year end. Check any invoice's tax split first with our GST Calculator.
1. Wrong GSTIN on the Invoice
This is the single most expensive typo in GST. If the supplier prints your old GSTIN, another branch's GSTIN, or a transposed digit, the invoice does not belong to you in the GST system, and the credit cannot be claimed against it. You cannot edit a supplier's invoice yourself — ask the supplier to issue a credit note against the wrong invoice, raise a fresh one with the correct GSTIN, and report the correction in their GSTR-1. Until then, do not claim the ITC. Prevention is a one-line habit: send every new supplier your GSTIN in writing and check each supplier's first invoice the day it arrives, not at month end.
2. Purchase Missing from GSTR-2B
Since ITC is now largely tied to GSTR-2B, an invoice your supplier forgot to report — or reported late, or under the wrong period — leaves you with no credit to claim that month. Before blaming the supplier, check the basics: the invoice may sit in your 2B under a different month, or the supplier may file quarterly and land later. If it is genuinely missing, follow up in writing for inclusion in their next GSTR-1. Build a monthly habit: download 2B, match it to your purchase register, and chase every gap within the same month. A gap found in April is a phone call; one found next March can be a lost credit.
3. Wrong Place of Supply (IGST vs CGST/SGST)
When the supplier gets the place of supply wrong, the wrong tax head is charged — IGST instead of CGST plus SGST, or the reverse. The total rate may look right, but the credit lands in the wrong head and your returns will not reconcile. This happens most with services, where place of supply follows the recipient's location, and with goods delivered to a different state from the billing address. The fix is a credit note and a corrected invoice, since the tax head cannot be fixed by a journal entry. When ordering, always state both billing and delivery addresses clearly, and check which tax head appears on the invoice.
4. Wrong HSN or SAC Code — and the Wrong Rate That Follows
A wrong HSN or SAC code on its own does not automatically kill ITC, but it is rarely harmless. The code determines the rate, and if the wrong code carries the wrong rate, the tax charged and the tax you claim will not line up — and a rate dispute can follow. It also creates trouble in e-invoicing and data matching, where your purchases are compared against what suppliers of that commodity normally report. If you spot a wrong code, ask the supplier to correct it with a credit note and a fresh invoice. For your own invoices, keep a short master list of products with their correct codes and rates, and reuse it instead of typing codes from memory.
5. Invoice Missing a Mandatory Field
A valid tax invoice must carry specific particulars: supplier and recipient names, addresses and GSTINs, a consecutive invoice number, the date, the description of goods or services, quantity, value, rate and amount of tax, and the supplier's signature or digital signature. Miss one and the document may not qualify as a tax invoice, which puts the ITC at risk. Commonly skipped items are the recipient's full address with state code, a broken invoice-number sequence, and tax not split into CGST/SGST or IGST. The fix is a corrected invoice from the supplier. Use invoicing software with mandatory fields for your own billing.
6. Claiming ITC on Blocked Credits
Some purchases never carry ITC, no matter how perfect the invoice: motor vehicles (with narrow exceptions), food and beverages, outdoor catering, beauty treatment, health services, club memberships, and goods or services for personal use, among others in the blocked-credit section. Claiming these invites reversal with interest when noticed. The fix is a short blocked-list pinned above whoever enters purchase bills, so these invoices are coded as expenses, not credits, from day one. If you have already claimed one, reverse it voluntarily in the next return rather than waiting for a notice.
7. Supplier Not Paid Within 180 Days
This rule catches businesses that claim ITC promptly but pay slowly. If you do not pay the supplier the invoice value plus tax within 180 days of the invoice date, the ITC claimed must be reversed in the period after those 180 days. You can reclaim it when you actually pay, but the reversal and re-claim are avoidable work — and if payment is never made, the credit is lost for good. The fix is process: run an ageing report of unpaid invoices every month and flag anything approaching 150 days. If a genuine dispute holds up payment, document it and discuss timing with your accountant before the 180 days expire.
8. Missing the ITC Claim Deadline
ITC on an invoice cannot be claimed forever. Broadly, it must be claimed by the earlier of 30 November following the end of the financial year to which the invoice relates, or the date of filing the annual return for that year. Businesses that reconcile only at year end regularly find a drawer of old invoices whose credit has already lapsed. The fix is monthly reconciliation (see mistake 2): every purchase matched to 2B within weeks, not months. If you have just taken over a business's books, the first job is an ITC ageing check — old unclaimed credits are the most common surprise in a handover.
9. E-Invoicing and QR Code Gaps for Large Suppliers
Businesses above the e-invoicing turnover threshold must report B2B invoices to the Invoice Registration Portal and print the IRN and QR code on the invoice. An invoice from such a supplier without an IRN is not a valid e-invoice, and claiming ITC on it invites trouble. If you receive one, ask for the IRN-reported version before claiming. The threshold has been lowered in stages, so verify the current threshold rather than assuming your supplier is exempt — and if you are near it, check it every year, since crossing it without e-invoicing creates a pile of invalid invoices in one quarter.
10. Debit and Credit Notes Filed in the Wrong Period
Rate changes, returns, post-sale discounts and quantity corrections all flow through debit and credit notes, which must be reported in the right period and linked to the original invoice. A credit note in the wrong period creates a mismatch: your ITC reversal lands in a different month from the supplier's adjustment, and both returns get flagged. The fix is a register linking every note to its original invoice number and date, reconciled alongside the purchase register each month. One linked register prevents most mismatch notices.
The Monthly 15-Minute ITC Checklist
- Download GSTR-2B and match it line by line to your purchase register.
- Chase gaps immediately — every missing invoice gets a written follow-up the same week.
- Check GSTINs on first invoices from every new supplier before claiming anything.
- Age unpaid invoices and flag anything over 150 days for payment before 180.
- Code blocked credits as expenses, never as ITC, from the moment the bill arrives.
- Verify tax heads and rates on each invoice against your calculator before filing.
🧾 Check Any Invoice's GST Split in Seconds
Enter the amount and rate to see the GST breakup, CGST/SGST vs IGST split, and the inclusive or exclusive total — before you claim a rupee of ITC.
Open the GST Calculator →New to GST maths itself — how the tax is added or stripped from a price, and how the CGST/SGST vs IGST split works? Start with our companion guide, GST Calculator Guide, then come back here and run the monthly checklist above on your own purchases.