What can an online seller claim?
| Purchase | Usually claimable? |
|---|---|
| Stock bought from GST-registered suppliers | Yes |
| Packaging: boxes, mailers, tape, labels | Yes |
| Courier and fulfilment (Shiprocket, Delhivery, warehousing) | Yes |
| Payment gateway fees (Razorpay, PayU, Cashfree and others) | Yes |
| Marketplace commissions and fees | Yes |
| Advertising billed with GST by an Indian entity | Yes |
| Software and subscriptions | Yes; if billed from abroad without GST, through reverse charge (below) |
| Photography, design, accounting and legal fees | Yes |
| Free gifts and samples, food for staff, personal use | No: blocked (below) |
What are the conditions?
Section 16 of the CGST Act sets them. All must hold:
- A tax invoice or debit note in your name, with your GSTIN.
- The invoice appears in your GSTR-2B, which is built from your supplier's GSTR-1 (section 16(2)(aa), since 2022).
- You received the goods or services.
- The supplier paid the tax, by filing its returns.
- You file your own GSTR-3B.
- You pay the supplier within 180 days of the invoice. If not, the credit is reversed with interest, and reclaimed once you pay.
The invoice should carry the GSTIN of the state that uses the purchase. Courier bills raised on your Karnataka GSTIN cannot be claimed by your Maharashtra registration.
What is blocked?
Section 17(5) lists purchases that never give credit, whatever their link to the business. The ones online sellers meet:
- goods given away as gifts or free samples, and goods lost, stolen, destroyed or written off;
- food and beverages, outdoor catering, beauty treatment and health services, with narrow exceptions;
- motor vehicles seating 13 or fewer, driver included, with exceptions, and their repairs and insurance;
- club memberships, and travel benefits for employees on holiday;
- anything for personal use.
What about Shopify and other foreign software?
Software billed from outside India without Indian GST is an import of services. A registered business pays the IGST on it itself, under reverse charge, in GSTR-3B Table 3.1(d), and claims the same amount back as credit in Table 4 of the same return. The cash goes out and the credit comes back, but the tax has to be paid in cash first.
Shopify's own help centre says a store in India is charged GST on its Shopify fees unless it gives Shopify its GSTIN, and that GST charged on invoices issued before the GSTIN was added cannot be reversed or refunded. Add your GSTIN in Shopify's billing settings, then account for the tax on the fees under reverse charge.
What is the deadline?
Credit for a financial year can be claimed up to 30 November after the year ends, or the date you file that year's annual return, whichever is earlier (section 16(4)). Credit on a March 2026 invoice not claimed by 30 Nov 2026 is lost.
Where does it go in GSTR-3B?
Table 4(A) shows the credit available, filled from GSTR-2B. Table 4(B) records what you reverse: blocked credit, and credit on invoices unpaid for 180 days. Table 4(C) is what you can use. Since October 2024 you can also accept, reject or keep pending each supplier invoice in the Invoice Management System (IMS) before GSTR-2B is made.
What if my credit is more than my tax?
It is carried forward in your electronic credit ledger to the next month. A brand selling mostly at 5% that buys services at 18% can build up credit it cannot use; for goods, a refund of credit that piles up from such an inverted rate structure can be claimed under section 54(3).