<p style="text-align:justify"><span style="font-size:14px"><span style="background-color:white"><span style="color:#1e314f">ITC can be availed only on goods and services for business purposes. If they are used for non-business (personal) purposes, or for making exempt supplies ITC cannot be claimed. Apart from these, there are certain other situations where ITC will be reversed.</span></span></span></p>

<p style="text-align:justify">&nbsp;</p>

<p style="text-align:justify"><span style="font-size:14px"><strong><span style="color:#1e314f">ITC will be reversed in the following cases-</span></strong></span></p>

<ol>
	<li style="text-align:justify"><span style="font-size:14px"><span style="background-color:white"><strong><span style="color:#1e314f">Non-payment of invoices in 180 days</span></strong><span style="color:#1e314f">&ndash; ITC will be reversed for invoices which were not paid within 180 days of issue.</span></span></span></li>
	<li style="text-align:justify"><span style="font-size:14px"><span style="background-color:white"><strong><span style="color:#1e314f">Credit note issued to ISD by seller</span></strong><span style="color:#1e314f">&ndash; This is for ISD. If a credit note was issued by the seller to the HO then the ITC subsequently reduced will be reversed.</span></span></span></li>
	<li style="text-align:justify"><span style="font-size:14px"><span style="background-color:white"><strong><span style="color:#1e314f">Inputs partly for business purpose and partly for exempted supplies or for personal use&nbsp;</span></strong><span style="color:#1e314f">&ndash; This is for businesses which use inputs for both business and non-business (personal) purpose. ITC used in the&nbsp;portion of input goods/services used for the personal </span><u><span style="color:black">purpose must be&nbsp;reversed proportionately</span></u><span style="color:#1e314f">.</span></span></span></li>
	<li style="text-align:justify"><span style="font-size:14px"><span style="background-color:white"><strong><span style="color:#1e314f">Capital goods partly for business and partly for exempted supplies or for personal use &ndash;</span></strong><span style="color:#1e314f">&nbsp;This is similar to above except that it concerns capital goods.</span></span></span></li>
	<li style="text-align:justify"><span style="font-size:14px"><span style="background-color:white"><strong><span style="color:#1e314f">ITC reversed is less than required-</span></strong><span style="color:#1e314f">&nbsp;This is calculated after the annual return is furnished. If total ITC on inputs of exempted/non-business purpose is more than the ITC actually reversed during the year then the difference amount will be added to output liability. Interest will be applicable.</span></span></span></li>
</ol>

<p style="text-align:justify">&nbsp;</p>

<p style="text-align:justify"><span style="font-size:14px"><span style="background-color:white"><u><span style="color:black">The details of&nbsp;</span></u><span style="color:black"><a href="https://cleartax.in/s/reverse-input-tax-credit-under-gstr-2/"><span style="color:black">reversal of ITC</span></a></span><u><span style="color:black">&nbsp;will be furnished in&nbsp;</span></u><span style="color:black"><a href="https://cleartax.in/s/gstr-3b"><strong><span style="color:black">GSTR-3B</span></strong></a></span><strong><u><span style="color:black">.</span></u></strong></span></span></p>