ITC-01 explained: credit on stock when you become a regular taxpayer

When ITC-01 applies

Section 18(1) of the CGST Act covers four situations:

• You apply for registration within 30 days of becoming liable: credit on inputs held in stock, and inputs in semi-finished or finished goods, on the day before liability arose
• You take voluntary registration: credit on such stock on the day before the date of registration
• You move from composition to normal tax: credit on inputs in stock, semi-finished and finished goods, and capital goods, on the day before you became liable to pay normal tax
• An exempt supply of yours becomes taxable: credit on the related stock and capital goods on the day before it became taxable

Time limits and conditions

Rule 40 requires ITC-01 to be filed within 30 days of becoming eligible, unless the Commissioner extends the period. Under Section 18(2), no credit is allowed on an invoice more than one year old. For capital goods, credit is reduced by 5 percentage points for every quarter or part of a quarter from the invoice date. A claim exceeding Rs. 2 lakh must be certified by a practising chartered accountant or cost accountant.

Filing and effect

ITC-01 is filed on the portal with details of each item: supplier GSTIN, invoice number and date, description, quantity, value and tax. The credit is added to the electronic credit ledger once filed. Keep the stock statement, purchase invoices and the certificate, since the claim is verifiable and often checked when the first returns show a large opening credit.

Common mistakes

Missing the 30-day window is the most common reason credit is lost. Others include claiming credit on capital goods under voluntary registration, where it is not allowed, and claiming on goods already sold or used. A professional can prepare the stock schedule and certification and file within time.

Get it handled for you

Need GST registration done right the first time? Our chartered accountants prepare the documents, file the application and handle any query, so you do not have to visit the GST office. Call or WhatsApp +91 63677 44602, or use the form below.

This guide explains the law in general terms as of October 2026. Time limits and requirements can depend on the facts of your case and on the notice you received.