Expenses, ITC and reverse-charge

Log business expenses with CGST / SGST / IGST and claim input tax credit. Turn on reverse-charge when you (not the supplier) pay the GST.

Business expenses matter for two things: your net profit and your GST input tax credit (ITC). Finocket captures both on one form — category, amount, the CGST/SGST/IGST you paid, supplier GSTIN, and whether the credit is claimable — and closes the loop when you file GSTR-3B.

Record a business expense

Tap + → Add expense, or press E.
Pick a category from the visual grid — it learns from your history, so your frequent picks surface first. The subcategory field autocompletes from your past entries, scoped to the picked category.
Enter the amount, payment mode and a description. Set the bill date and an optional due date if you're paying later.
Add line items if the bill has several distinct items — each with its own amount.
Fill the GST panel if you paid GST (below), then save.

In a hurry? Use Scan-to-Add — photograph the bill and Finocket prefills the form (see the Scan-to-Add guide).

Record GST and claim ITC on an expense

Turn on GST paid on this expense. A panel expands with:

Supplier GSTIN — required to claim ITC; the credit must trace to a registered vendor.
CGST + SGST rates and amounts for intra-state purchases, or IGST for inter-state.
Eligible for input tax credit — on by default. Turn it off for personal-use expenses or categories where GST law blocks ITC (motor vehicles for personal use, food & beverages, club memberships).
Reverse charge (RCM) — turn on when you, not the supplier, are liable to pay the GST: services from unregistered suppliers, goods transport agencies, advocates, director sitting fees.

How ITC flows to GSTR-3B

Finocket aggregates every ITC-eligible expense with a supplier GSTIN into Section 4A of your GSTR-3B (ITC available). Open GST → Returns, pick the month, and the ITC card shows the total CGST + SGST + IGST claimable, split RCM vs non-RCM. Reverse-charge expenses also show in Section 3.1(d) — GST you owe directly even though the supplier didn't charge it.

After you file, tap Mark ITC claimed for the period: every eligible, not-yet-claimed expense in that month is stamped with the claim period, drops out of “available ITC” so next month's 3B never double-counts it, and shows a green ITC claimed chip on the Expenses list.

Which expenses should NOT be marked ITC-eligible?

Personal expenses accidentally booked to the business.
Motor vehicles used personally (unless you're in transport / driving-school / car-hire).
Food, beverages, catering, health services, club memberships.
Goods lost, stolen, destroyed or written off (reverse the ITC).
Purchases from unregistered suppliers.

Access & control

Owners and assistants add and edit expenses; an invited accountant sees the list, the GST panel and the ITC summary read-only. Expenses are core — always on; the GST panel appears for India-region businesses.

Frequently asked questions

How do I record business expenses so I can claim GST ITC?

Record each expense with the GST panel on: supplier GSTIN, the CGST/SGST or IGST amounts, and ITC-eligible ticked. Finocket rolls eligible credits into your monthly GSTR-3B automatically, and stamps them claimed once you file.

What business expense categories should I use in India?

Common heads: rent, salaries, travel, fuel, telephone & internet, professional fees, raw materials, repairs, marketing, insurance, bank charges. Finocket's category grid covers these and learns your frequent picks; subcategories autocomplete from your history.

Which expenses can I claim for tax in India?

Any expense incurred wholly for the business reduces your taxable profit. For GST ITC specifically, the expense must be business-use, from a GST-registered supplier with their GSTIN on record — and not on the blocked-credit list (personal vehicles, food & beverages, club memberships).

What is reverse charge (RCM) on an expense?

Cases where you pay the GST to the government instead of the supplier — e.g. transport agencies, advocate fees, unregistered suppliers. Flip the RCM switch on the expense; Finocket reports it in GSTR-3B Section 3.1(d) and tracks the ITC where claimable.

What does "Mark ITC claimed" do?

After filing GSTR-3B, it stamps that month's eligible expenses as claimed so they leave the available-ITC pool and can't be counted again — each one gets an ITC-claimed chip on the Expenses list.

Clients, projects and invoices

Add clients with GSTIN + state auto-fill. Send invoices — tax invoice, bill of supply, export invoice, receipt or credit note — start from an estimate, or split an invoice into a deposit + milestone schedule.

Estimates, deposits and payment schedules

Send an EST-numbered estimate with a hosted accept link — your client accepts with a typed name recorded with a timestamp — convert it to an invoice in one tap, and collect through a deposit or milestone schedule that chases itself.

Progress billing and invoice templates

Bill an estimate, sales order or retainer in tranches — by percentage or amount — with a running billed/remaining tally that can never over-bill the job to the paisa, and pick from three invoice PDF templates that each keep your show-on-PDF custom fields.