The landscape of Input Tax Credit (ITC) under GST is constantly evolving. In the new financial year 2026-27, several key notifications have been released that fundamentally change how taxpayers must reconcile their purchases with vendor filings.

1. Mandatory GSTR-2B Matching

The era of "provisional credit" is officially over. Taxpayers can now only claim ITC if the underlying invoice is reflected in their GSTR-2B. The previous 5% buffer for un-matched invoices has been completely removed to curb fraudulent credit claims.

2. Rule 86B Restrictions

For businesses with a monthly taxable supply exceeding ₹50 lakhs, the restriction to pay at least 1% of the output tax liability through the electronic cash ledger remains a critical compliance point. There are, however, exemptions for those who have paid more than ₹1 lakh in Income Tax in previous years.

3. Timeline Extensions for Reconciliation

Businesses now have until the 30th of November following the end of the financial year to rectify any ITC omissions or errors. This provides a much-needed window for annual reconciliation before the final books are closed.

Conclusion

Strict adherence to vendor follow-ups is no longer optional. We recommend a monthly reconciliation process to ensure that your cash flow is not hampered by blocked credits.