ITC working sheet overview
The ITC Working tab computes your net eligible input tax credit for each period, accounting for reversals, RCM, and blocked credit.
4(A) Total ITC Available
All inward supplies — matched invoices from GSTR-2B reconciliation
4(B) ITC Reversed
Rule 42/43 proportionate reversal + other reversals under Rule 37, 38, 39
4(C) Net ITC Eligible
4(A) minus 4(B) — the amount available for set-off or refund
4(D) ITC Ineligible
Blocked credit under Sec 17(5) — motor vehicles, hospitality, personal use etc.
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ITC Working tab with Table 4 breakdown
Rule 42 / 43 reversal computation
Rule 42 applies to common credits used for both taxable and exempt supplies. Rule 43 applies to capital goods used for mixed purposes.
Rule 42 Formula
D1 = (T1 + T2 + T3) × (E + N) / T
T1 = ITC on inputs exclusively for exempt supplies
T2 = ITC on inputs for non-business use
T3 = Blocked ITC (Sec 17(5))
E = Exempt turnover, N = Non-business, T = Total turnover
💡 GSTAgent computes the Rule 42 reversal amount automatically when you enter your exempt and total turnover figures in the Firm Profile section.
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Rule 42/43 computation with turnover inputs
RCM liability identification
Reverse Charge Mechanism (RCM) entries are purchases where you (the buyer) pay GST instead of the supplier. GSTAgent identifies and segregates these automatically from the Tally Bridge data.
Common RCM categories detected:
- GTA (Goods Transport Agency) services
- Legal services from advocates
- Security services
- Director remuneration (where applicable)
- Rent for commercial property from unregistered landlord
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RCM Invoices tab showing category-wise breakdown
⚠️ RCM ITC is claimable only in the period when the tax is actually paid in cash. Ensure RCM liability is paid via GSTR-3B before claiming the corresponding ITC.
Blocked ITC under Section 17(5)
Section 17(5) of CGST Act lists purchases where ITC cannot be claimed regardless of business use.
Motor Vehicles
Cars, motorcycles (unless used for transport, driving school, or fleet rental)
Food & Beverages
Restaurants, catering, outdoor catering, food and beverages
Health Services
Membership of clubs, health & fitness, beauty treatment
Travel
Works contract services for construction of immovable property (own)
Insurance
Life insurance, health insurance for employees (except mandatory coverage)
💡 GSTAgent identifies potential blocked ITC entries by matching expense ledger names against Section 17(5) categories. Always review flagged entries with the actual invoice before disallowing.
Capital goods tracking
ITC on capital goods (plant, machinery, equipment) can be claimed in full in the year of purchase, subject to no blocked use. For mixed-use capital goods, Rule 43 reversal applies over 60 months.
1
View Capital Goods tab
In the sidebar, click Capital Goods to see all entries classified as capital assets from the Bridge sync or PR upload.
2
Verify classification
Review each entry — GSTAgent classifies based on HSN codes and purchase ledger names. Correct any misclassifications.
3
Apply Rule 43 if mixed use
If the capital good is used for both taxable and exempt supplies, GSTAgent computes the monthly reversal fraction (1/60 per month) under Rule 43.
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Capital Goods tracking table with ITC and reversal amounts
GSTR-9 annual return preparation
GSTR-9 consolidates all 12 months of GST data. GSTAgent's Monthly Tracker aggregates saved reconciliation data to pre-populate key GSTR-9 tables.
Table 6
ITC available (all sources) — auto-filled from 12 months of saved reconciliations
Table 7
ITC reversed under Rule 42/43 — computed from turnover ratios
Table 8
ITC comparison — 2B data vs Books data, difference auto-highlighted
Table 17
HSN-wise summary of inward supplies — extracted from PR data
💡 For GSTR-9 to be accurate, all 12 months must be reconciled and saved to the Monthly Tracker. Months not saved will show as blank in the GSTR-9 working sheet.
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GSTR-9 working sheet with auto-populated Table 6 and 8