COMPARATIVE ANALYSIS OF CHANGES MADE IN INPUT TAX CREDIT- PART-II
By: – Pradeep Jain
Goods and Services Tax – GST
Dated:- 17-12-2016
DAILY DOSE OF UPDATE BY CA PRADEEP JAIN
COMPARATIVE ANALYSIS OF CHANGES MADE IN INPUT TAX CREDIT- PART-II:-
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 list of exclusions has been provided wherein it is specified that the credit shall not be available for motor vehicles and other conveyances except when used for making taxable supplies like supply of such conveyances, transportation of passengers, imparting training or driving or for transportation of goods. The
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supply of similar nature. The dispute may arise on term "supply of similar nature". Suppose, a hotel take service of outward catering for marriage function of a client (Mandap Keeper service). Whether it will be treated as outward taxable supply of similar nature. Same will be the case of event management company.
The credit of rent-a cab, life insurance, health insurance will also not be available unless Government notifies that such services are obligatory for an employer to provide to its employees under any law for the time being in force. The admissibility of credit when such services are availed under obligation is a welcome step and was not there in earlier law.
With respect to availability of credit in special circums
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is question.
The registered taxable person shall be liable to pay an amount equal to input tax credit on capital goods reduced by the percentage points or tax on transaction value whichever is higher, in case of supply of capital goods or plant or machinery on which input tax credit has been taken. A new proviso has been added to provide that in case of refractory bricks, moulds and dies, jigs and fixtures supplied as scrap, taxable person may pay tax on transaction value of such goods. But the current Cenvat credit Rules provided for duty payment on value of scrap of all capital goods. But as per these new proposed provisions in revised draft GST Law, the duty is to be paid on such capital goods only even if they are scrap only.
You may
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