input tax credit 2025, GST ITC rules, GSTR-2B, GST audit, ITC reversal

With the 2025 GST amendments tightening ITC eligibility, businesses are feeling the heat. The revised rules mandate that ITC can be claimed only if suppliers have filed their GSTR-1 and paid tax in GSTR-3B.

This change, aimed at plugging fake credit claims, has made vendor compliance tracking a necessity. Notifications 265 and 266 (2025) introduced stricter timelines for ITC reversal, meaning even minor delays by vendors can impact working capital.

The ICAI GST & Indirect Taxes Committee recommends adopting robust ITC tracking mechanisms, conducting monthly GSTR-2B reconciliations, and maintaining an internal ITC ledger review.

CAs and consultants play a pivotal role here — educating clients about vendor hygiene, reconciliation practices, and technology integration will determine compliance success in 2025.