A common year-end headache occurs when a vendor issues an invoice dated late in March, but your warehouse receives the consignment or document in April. Business owners often wonder whether to record the purchase in the old year's books to save income tax, while accountants worry about mismatched GSTR-2B statements and audit queries under Section 16.
To understand the statutory baseline for claiming credit, review our detailed guide on input tax credit under GST and how GSTR-2B decides eligibility.
Which financial year does the ITC belong to?
Under Section 16(2)(b) of the CGST Act, no registered person can take credit of any input tax unless they have actually received the goods or services. In addition, Section 16(2)(aa) of the CGST Act requires that invoice details must be furnished by the supplier in their GSTR-1 and communicated to the recipient in Form GSTR-2B.
If the supplier issues an invoice dated 28 March (FY 2024-25) but dispatches the goods such that they reach your factory on 4 April (FY 2025-26), the condition of receipt under Section 16(2)(b) is satisfied only in FY 2025-26. Therefore, you cannot avail this credit in your March GSTR-3B. The credit belongs to FY 2025-26 and must be availed in your April GSTR-3B or a subsequent return within the statutory period.
Common mistake: Claiming ITC in March merely because the invoice date is 30 March, even though goods arrived in April. Tax officers verify e-way bill delivery dates and goods receipt notes (GRN). Claiming credit before physical receipt violates Section 16(2)(b) and invites demand notices with interest under Section 50.
Statutory time limit under Section 16(4)
Even though the credit is availed in the next financial year, the statutory window is tied to the financial year of the invoice. Under Section 16(4) of the CGST Act, a registered person cannot take input tax credit in respect of any invoice or debit note after 30 November following the end of the financial year to which such invoice pertains, or the date of furnishing of the relevant annual return, whichever is earlier.
For an invoice dated 29 March 2025 (FY 2024-25), the last date to avail the credit is the GSTR-3B filed for October 2025 (due by 20 November 2025), or any return filed up to 30 November 2025, unless the annual return for FY 2024-25 is filed earlier.
Accounting entries for goods in transit across financial years
To keep your statutory financial statements and GST returns aligned, follow this standard accounting practice at year-end:
- On 31 March (Year 1): If you book the purchase or liability at year-end before goods arrive, debit "Goods in Transit" and debit "GST Input Tax Credit Unclaimed Account", crediting "Sundry Creditors". Do not debit the live GST input ledger.
- On receipt in April (Year 2): Transfer "Goods in Transit" to "Inventory / Purchases", and transfer "GST Input Tax Credit Unclaimed Account" into your active "CGST / SGST / IGST Electronic Credit Ledger" once matched with GSTR-2B.
- Filing GSTR-3B: Claim the credit under Table 4(A)(5) ("All other ITC") in the April GSTR-3B return.
How to report in annual return Form GSTR-9
When an invoice relating to FY 2024-25 is claimed in GSTR-3B between April 2025 and October/November 2025, it affects two critical tables in Form GSTR-9 for FY 2024-25:
| GSTR-9 Table | Description | How to report |
|---|---|---|
| Table 8A | ITC as per GSTR-2B | Auto-populated from Form GSTR-2B and non-editable. It includes the March invoice if the supplier filed GSTR-1 for March. |
| Table 8B | ITC as per Table 6(B) | Auto-populated from Table 6B (ITC availed in GSTR-3B during the financial year). It will not include this invoice because you claimed it in Year 2. |
| Table 8C | ITC on inward supplies received during FY but availed in next FY | Enter the credit amount manually here. This bridges the difference between Table 8A and Table 8B. |
| Table 8D | Difference [8A - (8B + 8C)] | Calculated automatically as Table 8A - (Table 8B + Table 8C). Reporting the amount in Table 8C prevents an artificial negative or lapse figure in Table 8D. |
| Table 13 | Part V: ITC availed during previous financial year | Enter the credit availed in the returns of the next financial year up to the specified period. Per official guidelines, Part V tables do not auto-populate and must be filled manually. |
Guidance on Part V reporting is confirmed in the GSTN Manual on Form GSTR-9, which states that Tables 10, 11, 12, 13, and 14 do not auto-populate and must be entered manually.
Worked example: invoice dated March received in April
Consider Om Logistics Ltd, a registered distributor in Maharashtra. A supplier issues Invoice INV-8842 dated 27 March 2025 for industrial tools with a taxable value of ₹2,00,000 and 18% IGST of ₹36,000.
The consignment is received at the warehouse on 5 April 2025. Here is how the transaction is recorded and reported:
| Parameter | FY 2024-25 (Year 1) | FY 2025-26 (Year 2) |
|---|---|---|
| Invoice Date & Tax | 27 March 2025: IGST ₹36,000 | Goods received 5 April 2025 |
| Books of Account | Goods in transit: ₹2,00,000 GST unclaimed: ₹36,000 |
Purchases booked: ₹2,00,000 Active IGST ledger: ₹36,000 |
| GSTR-3B Table 4(A)(5) | ₹0 (not claimed in March 2025) | ₹36,000 claimed in April 2025 return |
| GSTR-9 Table 8A | ₹36,000 (auto-populated from GSTR-2B) | ₹0 (document belongs to prior year 2B) |
| GSTR-9 Table 8B | ₹0 (per Table 6B of FY 2024-25) | ₹36,000 (included in Table 6B of FY 2025-26) |
| GSTR-9 Table 8C | ₹36,000 (manually entered) | ₹0 |
| GSTR-9 Table 8D | ₹36,000 - (₹0 + ₹36,000) = ₹0 | Reconciled |
| GSTR-9 Table 13 | ₹36,000 (manually entered in Part V) | N/A |
Formula applied: Table 8D = Table 8A - (Table 8B + Table 8C). By entering ₹36,000 in Table 8C, Table 8D becomes ₹0, proving that all credit visible in GSTR-2B has been accounted for without any lapse or unverified claim.
Frequently asked questions
Can I claim ITC in Year 1 if the invoice and goods arrive in Year 2?
No. Under Section 16(2)(b) of the CGST Act, you cannot claim input tax credit until you have actually received the goods or services. If the goods or invoice arrive in April of Year 2, you must claim the credit in Year 2, not Year 1.
What is the absolute deadline to claim ITC on an invoice dated in the previous financial year?
Under Section 16(4) of the CGST Act, the deadline is 30 November following the end of the financial year to which the invoice pertains, or the date of filing the relevant annual return, whichever is earlier.
Where is prior-year ITC declared in annual return Form GSTR-9?
In Form GSTR-9 for the earlier year, credit availed in the subsequent financial year up to the specified period is reported in Table 8C and Table 13. These fields do not auto-populate and must be filled manually.
Check your own GSTR-2B
Reconcile your purchase register against monthly GSTR-2B downloads to identify invoices crossing financial year cutoffs before filing your annual return. Your GSTR-2B and purchase register files are read in your browser and never uploaded to any server.
Last checked: 24 October 2026. Sources: CBIC CGST Act Section 16, GSTN Form GSTR-9 User Manual.