How manufacturers should reconcile ITC every month
Written by Tax Paramarsh editorial teamReviewed by Tax Paramarsh GST deskLast updated 3 October 2026Applies to: GST rules in force on 3 October 2026
A manufacturer’s credit comes from many sources — raw materials, consumables, services, machinery and imports. Reconciling them every month is what keeps credit claimed, and notices away.
A monthly routine
- Close the purchase register — raw materials, consumables, services and capital goods, each tagged.
- Download GSTR-2B after the 14th and review new invoices in IMS.
- Match invoice by invoice — supplier GSTIN, number, date and tax.
- Match imports — Bills of Entry against IGST shown in 2B from customs data.
- Separate blocked and exempt-use credit — reverse what isn’t eligible.
- Check the 180-day rule — credit on supplier bills unpaid for 180 days must be reversed until paid.
- Track job work — inputs out for more than a year (capital goods: three years) are treated as supplied.
- Claim and record — claim eligible credit in GSTR-3B and keep a mismatch list for follow-up.
Watch inverted duty
If your inputs are taxed at higher rates than your products, unused credit can build up. A refund may be available — claimed within two years.
Key takeaways
- Match purchases, capital goods and imports with 2B monthly.
- Reverse blocked credit and unpaid-for-180-days credit.
- Track job work time limits.
Common questions
Can I claim credit on machinery in one go?
Generally yes, credit on capital goods is available in full when received, unless it is blocked or used only for exempt supplies.
How do I claim import IGST?
It appears in GSTR-2B from customs data; match it with your Bills of Entry and claim it in GSTR-3B.
Related
General information, reviewed on 3 October 2026 — not advice for your specific case. GST rules, forms and due dates change; talk to us before acting.