Goods and Services Tax – GST – By: – Alkesh Jani – Dated:- 19-6-2018 – In this session we shall Section 18 of CGST Act, 2017, which deals with ITC for a person required to obtain registration under this Act. Any person having all India aggregate turnover above ₹ 20 lakh (10 lakh if business is in Assam, Arunachal Pradesh, Himachal Pradesh, Uttarakhand, Manipur, Mizoram, Sikkim, Meghalaya, Nagaland or Tripura) are required to register under this Act. Any person, having turnover below the threshold limit can voluntarily opt to register. It is to be noted that ONLY registered person can avail ITC under GST Act. 2. Now we shall deal with sub-section (1)(a) of Section 18, which reads as under:- (1) Subject to such conditions and restrictions as may be prescribed- (a) a person who has applied for registration under this Act within thirty days from the date on which he becomes liable to registration and has been granted such registration shall be entitled to take credit of input tax in
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hased from a registered person on which GST has been paid. 2.1 The clause (b) allows the person to avail ITC for goods as above, who has obtained registration voluntarily. Further, clause (c) allows the person to avail ITC if he has opted out from the composition scheme availed under Section 10 and also for the capital goods, by reducing 5 point for quarter or part thereof and considering useful life of capital goods as 5 years i.e. 60 months. 2.2 The clause (d) states that if registered person was engaged in supply of exempted goods and /or services and if the said exempted goods and/or services becomes taxable, than, the said person is eligible ITC of goods held in stock, inputs contained in semi-finished or finished goods, on the preceding date when such goods becomes taxable. In all the above, scenario the ITC of capital goods shall be calculated as per Rules 40 of CGST, Rules, 2017. Please refer Notification No.2/2017 -CT (Rate) dated 28/06/2017, for exempted goods and Notificatio
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tax, is required to debit (reverse) the ITC in respect to goods held in stock and inputs contained in semi-finished goods or finished goods. For capital goods the reversal is also same and shall be calculated as above. After such reversal if any credit is still balance in electronic credit ledger, it shall lapse. The manner of reversal of ITC shall as per Rule 44 of CGST Rules, 2017. 6. A registered person who has availed ITC of capital goods or of plant and machinery, shall reduced the value by 5 point per quarter or part thereof and determine the transaction value, whichever is higher shall be considered as taxable value. The illustration is given at Rule 44 (b) of CGST Rules, 2017. When refractory bricks, mould and dies and fixtures are supplied (sold) as scrap, GST is payable on transaction value. 7. The section 19 to 21 of CGST Act, 2017 deals with Job-work and Input service distributor, requires separate heading and hence shall be dealt with same in future. 8. Concluding, the hea
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