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Input tax and its credit: section 2 of the CGST Act, 2017

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GST›CGST Act, 2017›Section 2, definitions

These definitions distinguish capital goods, inputs and input services by their business use and, for capital goods, capitalisation. Input tax covers the stated taxes charged to a registered person, including import and reverse-charge taxes, but excludes composition levy. Input tax credit is credit of that input tax. The Input Service Distributor definition links service invoices for distinct persons to distribution.[1]

Text

The text below is these clauses of the section as served by the CBIC tax information portal on 17 September 2026, with the portal's own amendment footnote markers (shown as small numerals before a bracket) and its footnotes.[1] The Act as published in the Gazette of India is the legal source.

Clauses 2(19), 2(59), 2(60), 2(61), 2(62) and 2(63), verbatim (show)

(19) "capital goods" means goods, the value of which is capitalised in the books of account of the person claiming the input tax credit and which are used or intended to be used in the course or furtherance of business;

(59) "input" means any goods other than capital goods used or intended to be used by a supplier in the course or furtherance of business;

(60) "input service" means any service used or intended to be used by a supplier in the course or furtherance of business;

(61) 17[“Input Service Distributor” means an office of the supplier of goods or services or both which receives tax invoices towards the receipt of input services, including invoices in respect of services liable to tax under sub-section (3) or sub-section (4) of section 9 18[of this Act or under sub-section (3) or sub-section (4) of section 5 of the Integrated Goods and Services Tax Act, 2017], for or on behalf of distinct persons referred to in section 25, and liable to distribute the input tax credit in respect of such invoices in the manner provided in section 20;]

(62) "input tax" in relation to a registered person, means the central tax, State tax, integrated tax or Union territory tax charged on any supply of goods or services or both made to him and includes-

(a) the integrated goods and services tax charged on import of goods;

(b) the tax payable under the provisions of sub-sections (3) and (4) of section 9;

(c) the tax payable under the provisions of sub-sections (3) and (4) of section 5 of the Integrated Goods and Services Tax Act;

(d) the tax payable under the provisions of sub-sections (3) and (4) of section 9 of the respective State Goods and Services Tax Act; or

(e) the tax payable under the provisions of sub-sections (3) and (4) of section 7 of the Union Territory Goods and Services Tax Act,

but does not include the tax paid under the composition levy;

(63) "input tax credit" means the credit of input tax;

* Enforced w.e.f. 22nd July 2017.

17. Substituted (w.e.f. 01.04.2024) by s. 11 of The Finance (No. 8) Act, 2024.

18. Inserted (w.e.f. 01.04.2025) by s. 121 of The Finance (No. 7) Act, 2025.

2(19)capital goods

"capital goods" means goods, the value of which is capitalised in the books of account of the person claiming the input tax credit and which are used or intended to be used in the course or furtherance of business;Section 2(19)

The claimant must capitalise the goods’ value in its books of account. The goods must be used or intended for use in the course or furtherance of business.

2(59)input

"input" means any goods other than capital goods used or intended to be used by a supplier in the course or furtherance of business;Section 2(59)

Goods other than capital goods qualify as inputs when used or intended for business by the supplier.

2(60)input service

"input service" means any service used or intended to be used by a supplier in the course or furtherance of business;Section 2(60)

The service must be used or intended for business by the supplier.

2(61)Input Service Distributor

“Input Service Distributor” means an office of the supplier of goods or services or both which receives tax invoices towards the receipt of input services, including invoices in respect of services liable to tax under sub-section (3) or sub-section (4) of section 9 of this Act or under sub-section (3) or sub-section (4) of section 5 of the Integrated Goods and Services Tax Act, 2017, for or on behalf of distinct persons referred to in section 25, and liable to distribute the input tax credit in respect of such invoices in the manner provided in section 20;Section 2(61)

The office receives input-service tax invoices for or on behalf of distinct persons under section 25 and is liable to distribute the related credit under section 20. Included invoices cover the stated CGST and IGST reverse-charge services. The substituted definition and the words on integrated tax services both apply from 1 April 2025.

2(62)input tax

"input tax" in relation to a registered person, means the central tax, State tax, integrated tax or Union territory tax charged on any supply of goods or services or both made to him and includes- (a) the integrated goods and services tax charged on import of goods; (b) the tax payable under the provisions of sub-sections (3) and (4) of section 9; (c) the tax payable under the provisions of sub-sections (3) and (4) of section 5 of the Integrated Goods and Services Tax Act; (d) the tax payable under the provisions of sub-sections (3) and (4) of section 9 of the respective State Goods and Services Tax Act; or (e) the tax payable under the provisions of sub-sections (3) and (4) of section 7 of the Union Territory Goods and Services Tax Act, but does not include the tax paid under the composition levy;Section 2(62)

The definition covers central, State, integrated or Union territory tax charged on supplies to a registered person. It includes IGST on imported goods and the specified reverse-charge taxes under the named GST Acts, but excludes composition levy.

2(63)input tax credit

"input tax credit" means the credit of input tax;Section 2(63)

The term means credit of input tax as defined in this section.

Questions to answer on the file

Questions a reviewer answers from the engagement file, grouped by the part of the section they come from. They describe what the section asks; they do not decide it.

Input tax and its credit clauses (19), (59), (60), (61), (62) and (63)

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Amendment history

The CBIC text carries 2 footnotes. The table gives each in the source's own terms. Effective dates are as the footnotes state them.[1]

Amendments to section 2 as footnoted in the CBIC text
NoteChangeInstrumentEffective from
17"Input Service Distributor" substituteds.11 of the Finance (No. 8) Act 2024[2]01.04.2024
18the words carrying sub-sections (3) and (4) of section 5 of the Integrated Goods and Services Tax Act 2017 inserteds.121 of the Finance (No. 7) Act 2025[3][4]01.04.2025

See also

References

  1. Central Board of Indirect Taxes and Customs. "Section 2. Input tax and its credit". Central Goods and Services Tax Act, 2017, CBIC tax information portal, with amendment footnotes 1 to 2. Retrieved 17 September 2026.
  2. The Finance (No. 8) Act, 2024. Cited in CBIC footnote 17.
  3. The Finance (No. 7) Act, 2025. Cited in CBIC footnote 18.
  4. The Integrated Goods and Services Tax Act, 2017. Cited in CBIC footnote 18.

External links