Input tax credit (ITC)
The GST you paid your suppliers, set off against the GST you collected from your customers, so you pay the government only the difference.
Input tax credit is what stops GST from stacking at every stage. You collect tax on your sales, deduct the tax on your purchases, and pay the balance.
Credit is not automatic
To claim it you generally need the tax invoice, the goods or services actually received, the supplier's supply reflected in your purchase statement, and the tax paid by the supplier. If your supplier does not report the invoice, the credit is not available to you no matter how genuine your purchase was.
Where the money leaks
Small purchases entered without the GSTIN. Bills paid in cash and never recorded. Suppliers who file late. Credit on items that are blocked by law. Each one is a real rupee cost, and the amounts add up quietly across a year.
Time limits
There is a cut-off for claiming credit for a financial year, tied to a return due date after the year ends. Miss it and the credit lapses permanently. Confirm the current cut-off with your tax advisor.
How KillStock handles it
On the Growth plan and above, purchase invoices are captured against the purchase order with their taxes, so the input side of your GST position is built from the same records as your stock. Supplier debit notes for short or rejected goods adjust both the stock and the ledger.
A common mistake
Chasing a defaulting supplier only at filing time. Check that your large suppliers' invoices are appearing month by month; the conversation is much easier while the relationship is current.