Goods and Services Tax – GST – By: – Pradeep Jain – Dated:- 16-12-2016 Last Replied Date:- 19-12-2016 – COMPARATIVE ANALYSIS OF CHANGES MADE IN INPUT TAX CREDIT- PART-I:- This update seeks to highlight the changes made in the Revised GST Law as compared to the old GST Draft with respect to provisions relating to input tax credit as follows:- A new proviso in section 16(1) specifying the manner of credit availment in case of pipelines and telecommunication tower fixed to Earth has been inserted which states that the input tax credit shall not exceed one third in the financial year in which said goods are received. The assessee can further avail upto two third of the total credit in the year succeeding the year of receipt and the balance cre
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tion 17(2) which pertains to credit availment provision for persons effecting taxable supplies and exempt supplies. The provision states that the registered taxable person shall be eligible for availing input tax credit as is attributable to taxable supplies including zero rated supplies made by him. The explanation further clarifies that exempt supplies shall include supplies on which recipient is liable to pay tax under reverse charge mechanism. This has the effect that credit will not be available for supplies for which tax is payable by recipient under reverse charge mechanism. A special provision for banking company or financial institution has been proposed which is in line with the present provisions of Rule 6 of the Cenvat Credit Ru
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n capital goods is denied only if they are exclusively used in exempted goods/services but in the proposed GST law, there are provisions for credit reversal even in case of capital goods partly used for taxable and exempt supplies. We will draw your attention on the remaining changes made in input tax credit provisions in the revised GST Law in our next update. – Reply By Ganeshan Kalyani – The Reply = The clause discussed in point 2 states that credit would be allowed only if the payment to the service provider. Does this indirectly implies that only if receiver of service does the payment of the value of service render to the service provider, the service provider shall deposit the tax so charged on the invoice . What if he has collected
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