ITC is a statute. The scan gate only proves some of the paperwork.

Your CA sends a message: the ITC claim on invoice 447 is denied. The GSTIN does not match any registered taxpayer. You look at the invoice. The number looks right. It is 15 characters. The format check passed. Nobody rechecked the math.

Section 16 of the CGST Act says you can claim ITC only if the invoice meets certain conditions. The supplier must be registered. The GSTIN must be valid. The tax must have been actually paid to the government. The invoice must carry the required details. If any of these conditions are not met, the ITC claim is denied.

Section 50 of the CGST Act provides for interest on delayed tax and, where it applies, on wrongly availed and utilised ITC. Read the Act for the current rate and conditions. Do not treat a blog as the notification. The cost is not just the denied credit. It is the interest, the time spent amending the return, and the scrutiny that follows. A single wrong ITC claim can trigger a broader review of your entire return.

This is not legal advice. Open the CGST Act on CBIC and the circulars that amended it. Time limits under 16(4), the invoice-furnishing condition, and blocked credits under 17 have all moved. If a blog (including this one) disagrees with the PDF in your browser, the PDF wins.

What the validator touches, and what it does not

EntryLedger can prove: GSTIN shape, HSN format, arithmetic within ₹1, regime consistency. Those are the operational checks. They make a cleaner voucher. They do not make the supplier registered or tax-paid. That is the gap between a scan and a filing.

Interest if you got it wrong

Section 50 deals with interest. Rate and when it applies (delayed tax, wrongly availed and utilised ITC) are in the Act and later notifications. Often discussed as 18% per annum. Confirm before you model a spreadsheet. Link: same CBIC PDF. Our ITC checks post is the operational list. This page is the statutory one.

What EntryLedger is allowed to say

We block auto-export when GSTIN, required fields, line tax fields, arithmetic ±₹1, or regime fail. That makes a cleaner voucher. It is not "section 16 certified." Anyone who stamps "ITC eligible" on an OCR row is lying about 16(2)'s payment-to-government limb.

2B is how you see whether the supplier furnished the invoice. We do not ship 2B recon today. 1 vs 2B vs 3B is the map. Keep Clear or the CA for filing.

Composition, RCM, and blocked credits (motor cars, etc. under 17) are further filters. We do not auto-classify those. Review plus the CA.

Blocked credits and documents that are not invoices

Section 17 blocks or restricts credit on categories the Act lists (the motor-vehicle examples everyone remembers are only part of it). Read 17. We do not classify "this HSN is a blocked car." HSN format is not a 17 engine. A clerk who knows the PO is buying a passenger car should not expect the gate to save them The clock on all of this is 16(4), and I gave it its own page with the October playbook. from 17.

Challans, lorry receipts, and proforma pages are not tax invoices. Page classing tries to keep some of them out. Credit notes are a hole we already admitted. Section 16 wants the document the Act names. Pixels of a challan that happen to checksum a GSTIN are not that document.

A row that passes us and still fails 16: GSTIN checksums. HSN is eight digits. Lines add. Tax matches the printed rate. Regime matches the two prefixes. AUTO_EXPORTED. Tally posts. Supplier never files GSTR-1. 2B has no line. 16's "furnished by the supplier" / tax-paid story is not satisfied, whatever the exact clause number is this year. The gate did its job. ITC still waits. That is not a product bug. It is the split between paperwork and GSTN.

If a notice arrives, the trail you want is: scan, crop, validator log, who confirmed, then 2B. Confidence 92% is not a trail. See the Clear vs us talk track: CAs like a total that summed. They also like a 2B line. We only sell the first today.