Phyntara

Tutorial · GST · The law in practice

08 · Buying, tax credit, and why a PDF is not 2B

You paid GST to a vendor. Credit is not automatic. The vendor must exist, the bill must be real, 2B must show it, and IMS must not be left hanging. About 10 min. As of August 2026.

This tutorial explains GST the way a new founder or accounts clerk needs it, and how the same work is done in Phyntara. It is teaching, not a legal opinion. Thresholds, due dates, and late fees change when the GST Council notifies them. Your CA files. Confirm the live rule on gst.gov.in before you act on a rupee.

Input tax credit is the GST you paid on business purchases that you are allowed to subtract from the GST you collected on sales. Section 16 is a list of conditions, not a vibe.

  1. You have a tax invoice (or debit note, or specified bill of entry) — not a proforma, not a WhatsApp photo with no number.
  2. You received the goods or services.
  3. The tax has been actually paid to the government (the law reaches this through the supplier’s return — which is why 2B exists).
  4. You have filed your return.
  5. Time limit: generally claim in a return filed by 30 November following the FY or the annual return, whichever is earlier (confirm the live section 16(4) text).
  6. The vendor GSTIN is not cancelled / the supply is not from a person you must not credit.

Blocked credit (Section 17(5)) — common landmines

  • Motor cars (with specified exceptions — e.g. you are in the business of transporting passengers).
  • Food, beverages, outdoor catering, beauty treatment, health services, life insurance, club memberships — with narrow exceptions.
  • Works contract and construction of immovable property on your own account (office interior is where startups fight and often lose).
  • Personal use, gifts, goods lost/stolen/written off.
  • Composition dealers’ bills: no ITC.

GSTR-2B

2B is a statement the portal generates (generally around the 14th) of inward supplies as your suppliers filed. If last month’s vendor bill is not in 2B, you should not treat that GST as credit yet. A scan of the vendor’s PDF is not 2B. Phyntara’s owner copy: “This vendor still has not filed last month’s bill. Do not pay them again until your CA confirms.”

IMS (Invoice Management System)

IMS is the government queue where you accept, reject, or keep pending invoices your suppliers pushed. From the 2025–26 design onward, inaction can be treated as acceptance — do not leave a junk invoice sitting. The owner does not operate IMS in Phyntara. The CA does. If a bill is not accepted, pay can stay on hold. Owner-facing language is “your CA must confirm this bill,” not “IMS_PENDING.”

Golden Square

Phyntara will not treat a rupee as safe to leave the company until four things are green: live GSTIN, books (the bill you saved), 2B, and IMS. We do not freeze on OCR alone. A scan that “looks like ₹1,02,000” is a warning to confirm the typed total — it is not the freeze.