Goods and Services Tax – GST – By: – Puneet Agrawal – Dated:- 3-11-2016 Last Replied Date:- 4-11-2016 – Link to the video : https://www.youtube.com/watch?v=UnTX60ZfvnY GST 10 point series on Input tax credit – concept One of the major reason for introducing GST is making the credit mechanism seamless so that there is no cascading effect of taxes. In the Model GST law provisions relating to input tax credit are majorly covered in Section 16, 16A, 17, 18, 28, 29 and 35 of the CGST Act/ SGST Act. Vide Section 27 of the IGST Act, provisions relating to input tax credit and utilization thereof, as applicable in CGST Act would apply even in respect of IGST. Input tax credit in relation to taxable person means credit of : {IGST and CGST}/{IGST and SGST} charged on any supply of goods and/or services to him (includes even importation) which are used, or are intended to be used, in the course or furtherance of his business and includes the tax payable on reverse charge basis Thus as per the de
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ssible to him. Thus registration is a pre-requisite for taking credit of input tax. The eligible input tax credit would be credited to the electronic credit ledger and it can be used for payment of taxes under the Act or Rules made thereunder. For newly registered person, ITC is allowed in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the day preceding the date from which the person becomes liable to pay tax provided he applies for registration within 30 days of becoming liable to obtain registration. A taxable person shall not be entitled to take input tax credit in respect of any supply after the earlier of following two events filing of return under section 27 for the month of September following the end of financial year to with such invoice pertains; or filing of the relevant annual return GST 10 Point Series on Manner of taking Input tax credit – conditions and restrictions Registered taxable person shall be entitled to t
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e. to ensure availability of credit of tax paid in a easy and convenient manner to taxpayers. Where the goods against an invoice are received in lots or installments, the registered taxable person shall be entitled to the credit upon receipt of the last lot or installment. Where the registered taxable person has claimed depreciation on the tax component of the cost of capital goods under the provisions of the Income Tax Act 1961, the input tax credit shall not be allowed on the said tax component. At first, taxable person is only allowed to take the credit of input tax, as self assessed in the his return, on a provisional basis and such amount shall be credited to the electronic credit ledger. The claim of input tax credit shall be finally accepted once the details of inward supplies furnished by the taxable person is matched with the corresponding details of outward supplies furnished by corresponding taxable person. Where after matching it is discovered that the ITC claimed by recipi
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