Income Tax – By: – sandeep rawat – Dated:- 3-8-2018 – GST comprises of the following levies: a. Central Goods and Services Tax (CGST) [also known as Central Tax] on intra-state or intra-union territory without legislature supply of goods or services or both. b. State Goods and Services Tax (SGST) [also known as State Tax] on intra-state supply of goods or services or both. c. Union Territory Goods and Services Tax (UTGST) [also known as Union territory Tax] on intra-union territory supply of goods or services or both. d. Integrated Goods and Services Tax (IGST) [also known as Integrated Tax] on inter-state supply of goods or services or both. In case of import of goods also, the present levy of Countervailing Duty (CVD) and Special Additional Duty (SAD) would be replaced by integrated tax. The mechanism of input credit under GST to avail and utilize the credit of these taxes is as follows: Credit of To be utilised first for payment of May be utilised further for payment of CGST SGST/U
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e of invoice, failing which the amount of credit availed by the recipient would be added to his output tax liability, with interest [rule 2(1) & (2) of ITC Rules]. However, once the amount is paid, the recipient will be entitled to avail the credit again. In case part payment has been made, proportionate credit would be allowed. C. Documents on the basis of which credit can be availed are: a. Invoice issued by a supplier of goods or services or both b. Invoice issued by recipient alongwith proof of payment of tax c. A debit note issued by supplier d. An invoice issued under certain circumstances like the bill of supply issued instead of tax invoice if the amount is less than ₹ 200 or in situations where the reverse charge is applicable as per GST law. e. Bill of entry or similar document prescribed under Customs Act f. Revised invoice g. Document issued by Input Service Distributor All these documents are to furnished at the time of filing form GSTR-2. D. No ITC beyond Septem
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law; iv. Travel benefits extended to employees on vacation such as leave or home travel concession; c. Works contract services when supplied for construction of immovable property, other than plant & machinery, except where it is an input service for further supply of works contract; d. Goods or services received by a taxable person for construction of immovable property on his own account, other than plant & machinery, even when used in course or furtherance of business; e. Goods and/or services on which tax has been paid under composition scheme; f. Goods and/or services used for private or personal consumption, to the extent they are so consumed; g. Goods lost, stolen, destroyed, written off, gifted, or free samples; h. Any tax paid due to short payment on account of fraud, suppression, mis-declaration, seizure, detention. G. Special circumstances under which ITC is available: a. A person who has applied for registration within 30 days of becoming liable for registration is
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in stock (inputs as such and inputs contained in semi-finished or finished goods) relatable to exempt supplies. He shall also be entitled to take credit on capital goods used exclusively for such exempt supply, subject to reductions for the earlier usage as prescribed in the rules. e. ITC, in all the above cases, is to be availed within 1 year from the date of issue of invoice by the supplier. f. In case of change of constitution of a registered person on account of sale, merger, demerger etc, the unutilised ITC shall be allowed to be transferred to the transferee. g. A person switching over from composition scheme under section 10 to normal scheme or where a taxable supply become exempt, the ITC availed in respect of goods held in stock (inputs as such and inputs contained in semi-finished or finished goods) as well as capital goods will have to be paid. h. In case of supply of capital goods or plant and machinery, on which ITC is taken, an amount equivalent to ITC availed minus the r
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. Directly from the place of supply of the supplier of such goods However, to enjoy ITC, the goods sent must be received back by the principal within 1 year (3 years for capital goods). ITC Provided by Input Service Distributor (ISD) An input service distributor (ISD) can be the head office (mostly) or a branch office or registered office of the registered person under GST. ISD collects the input tax credit on all the purchases made and distribute it to all the recipients (branches) under different heads like CGST, SGST/UTGST, IGST or cess. ITC on Transfer of Business This applies in cases of transfer of business. The transferor will have available ITC which will be passed to the transferee at the time of transfer of business. REVERSAL OF INPUT TAX CREDIT ITC can be availed only on goods and services for business purposes. If they are used for non-business (personal) purposes, or for making exempt supplies ITC cannot be claimed. Apart from these, there are certain other situations wher
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