How to enter Ineligible ITC? | Ineligible ITC in GSTR3B

If you are a registered person under GST, then you are eligible to avail input tax credit for tax paid on your purchase of goods and services. That is tax on inputs which are used for business purpose will be considered as eligible ITC.

However, there are some goods and services on which ITC cannot be availed. For example, GST paid on car for personal use is considered Ineligible ITC.

To perform the same entry in Book Keeper, you need to follow below steps:

1. While creating Purchase voucher you will get one option Default on top center, click on that and select Purchase Ineligible ITC.

2. In Purchase Account you need to select Fixed Asset Account. For example, Vehicle.

3. Now you need to select Supplier and enter the taxable amount in Sub Total, select Tax and you can save the voucher.

As you can see in below GSTR3B Report the amount is coming under Ineligible ITC section.

Also the Tax Amount will come in negative under Duties and Taxes, so you need to transfer that amount to the value of vehicle. For this you need to create Journal Voucher.

4. You need to go to Transaction > Journal > Create.

Select the Vehicle Account, enter total tax amount on debit side. Select SGST and CGST tax account, enter individual tax amount on credit side.

You can now check Trial Balance, the amount will now be included in Fixed Asset value.