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

The form opens on Basic: category, amount, date, payment mode and a description. Everything else is in a section of its own: Supplier & bill, GST & ITC, TDS withheld, Stock lines, Allocation (HSN/SAC, subcategory, cost centre, project) and Custom fields. A section opens by itself when it holds something, or when a field in it needs fixing; the switches inside GST, TDS and Stock lines turn those features on and off. Use the section list on the right, or the row under the header on a phone, to jump between them. Edit expense has the same sections.

1. Tap + → Add expense, or press ⌥E/Alt+Shift+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. Need a heading of your own? Open More and choose Add new category at the top of the list.
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. The item box searches your items, and Add new item at the top of its list creates one without leaving the bill.
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).

Open an expense you already recorded

Tap an expense on the Expenses list, in search, in a ledger or in a report and it opens as a read-only summary first, so you can check it without risking a change. The summary shows the amount and category, whether it is paid, part paid or unpaid, the date, the payment mode, who you paid, the bill number, and the bill date and due date where you set them. If the expense carries GST, a GST card shows the CGST, SGST and IGST split, the total tax, the supplier GSTIN, whether the input tax credit is eligible and whether reverse charge applies. Your notes and the receipt photo follow, when there are any.

Edit, Duplicate and Delete sit at the top. Edit opens the same form you used to record it, and saving brings you back to the summary. A purchase bill's item lines can be changed there too: correct a quantity or cost, add a line or remove one. The bill's amount is the total of its lines, and stock taken in by the bill follows the lines you save. Duplicate saves a copy of the expense, without the receipt photo, and takes you back to the list. Delete asks you to confirm first.

Don’t want categories? Turn them off

Not every business sorts its spending. If yours files everything under one heading (a fabricator entering supplier bills, say), the category grid is a step between you and a saved record. Open Settings → Expense defaults and turn off Ask for a category on every expense. The picker and its sub-category disappear from the form, which gets shorter.

You then choose what every expense is filed under, and that field is not optional: an expense needs a heading in your books, so this is the one they all get. Name it whatever your accounts call it, such as Purchases or Direct expenses. Left blank it becomes Uncategorised. Your reports still group by this heading, so they will show one row instead of several.

The HSN/SAC code stays on the form either way. What you bought still has a code and an ITC claim still needs it, whether or not you sort by category. Turn categories back on at any time and every expense you already recorded keeps the heading it was filed under.

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), the 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 and always on; the GST panel appears for India-region businesses.

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