Tracking GST and input tax credit on business expenses

When you pay a GST-registered supplier, the price you pay usually already includes GST. For a business, that tax can often be claimed back as input tax credit (ITC), which is why seeing the GST inside each expense is worth the effort.

The GST inside a price

Because the amount on your statement is GST-inclusive, the tax is found by working backwards: amount × rate ÷ (100 + rate). A purchase of ₹11,800 at an 18% rate contains ₹1,800 of GST on a base price of ₹10,000.

What input tax credit needs

The detailed rules are set by the GST law and your CA will know them, but the common ingredients are worth having ready:

• A valid tax invoice from the supplier, in your business’s name.
• Proof that the goods or services were received.
• Use for the business, not for personal consumption.
• Categories where credit is allowed. Some purchases are blocked from credit, so do not assume every business expense qualifies.

How to set it up in SpendixAI

1. Give each category its GST rate and mark whether it is ITC-eligible and tax-deductible.
2. Mark business transactions as business, so personal spending stays out of the totals.
3. Keep the receipt or invoice with the transaction it explains.
4. Open the GST and ITC-eligible spend report in the Report library at month end.

That report lists ITC-eligible spending by category with an estimate of the GST included. The Tax-deductible expenses report does the same for deductions, with each category’s accounting code.

Hand over a clean record

Reports can be downloaded as CSV, so your CA can open them in a spreadsheet or import them into accounting software. A tidy month-end record usually saves more of their time than any single report.