Expenses, ITC and reverse-charge

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

1. Tap + → Add expense, or press E.
2. 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.
3. Enter the amount, payment mode and a description. Set the bill date and an optional due date if you're paying later.
4. Add line items if the bill has several distinct items — each with its own amount.
5. 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.

Related: Reports & GST filings, Day Book, Cashbook & Outstanding.