What are the provisions for recovery of excess/ wrongly distributed credit by ISD?

Question 6 – Draft-Bills-Reports – Concept of Input Service Distributor in GST – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 6 – Q 6. What are the provisions for recovery of excess/ wrongly distributed credit by ISD? Ans. Sections 18(1) and 18(2) provide for recovery of excess/wrongly distributed credit by initiating action against the ISD itself or against the recipient of credit so distributed under section 51 of the Model GST Law. – Statutory Provisions, Acts, Rules, Regul

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Can a company have multiple ISD?

Can a company have multiple ISD? – Question 5 – Draft-Bills-Reports – Concept of Input Service Distributor in GST – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 5 – Q 5. Can a compan

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What are the conditions/restrictions for distribution of credit?

Question 3 – Draft-Bills-Reports – Concept of Input Service Distributor in GST – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 3 – Q 3. What are the conditions/restrictions for distribution of credit? Ans. The distribution of credit would be done subject to the following conditions: a) Credit should be distributed through tax invoice or other document as prescribed; b) Amount of credit distributed should not exceed the amount of credit available; c). Credit should be distribute

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What are the requirements for registration as ISD?

Question 2 – Draft-Bills-Reports – Concept of Input Service Distributor in GST – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 2 – Q 2. What are the requirements for registration as ISD? Ans. An ISD is required to obtain registration as a deemed supplier of services [section 19 read with para 5(vii) of Schedule III]. The threshold limit of registration is not applicable to ISD. The registration of ISD under the existing regime (i.e. under Service Tax) would not be migrated in G

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What is Input Service Distributor (ISD)?

Question 1 – Draft-Bills-Reports – Concept of Input Service Distributor in GST – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 1 – Q 1. What is Input Service Distributor (ISD)? Ans. As per Section 2(56) of MGL, ISD means an office of the supplier of goods and / or services which receives tax invoices issued under section 23 towards receipt of input services and issues tax invoice or such other document as prescribed for the purposes of distributing the credit of CGST (SGST in S

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What will be the tax impact when capital goods on which ITC has been taken are supplied by taxable person?

What will be the tax impact when capital goods on which ITC has been taken are supplied by taxable person? – Question 31 – Draft-Bills-Reports – Input Tax Credit – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 31 – Q 31. What will be the tax impact when capital goods on which ITC has been taken are supplied by taxable person? Ans. As per section 16(15) of the MGL, in case of supply of capital goods on which input tax credit has been taken, the registered taxable person shall pay

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Section 29 of the MGL provides that the ITC would be confirmed only if the inward details filed by the recipient are matched with the outward details furnished by the supplier in his valid return. What happens if there is a mismatch?

Question 30 – Draft-Bills-Reports – Input Tax Credit – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 30 – Q 30. Section 29 of the MGL provides that the ITC would be confirmed only if the inward details filed by the recipient are matched with the outward details furnished by the supplier in his valid return. What happens if there is a mismatch? Ans. In case of mismatch between the inward and outward details, the supplier would be required to rectify the mis-match within a period

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Is there any negative list on which ITC is not permitted?

Question 29 – Draft-Bills-Reports – Input Tax Credit – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 29 – Q 29. Is there any negative list on which ITC is not permitted? Ans. Section 16 (9) of the MGL provides for the negative list with respect to the admissibility of ITC. It has been provided that the ITC on following items cannot be availed: (a) motor vehicles, except when they are supplied in the usual course of business or are used for providing the following taxable services- (i) transportation of passengers, or (ii) transportation of goods, or (iii) imparting training on motor driving skills; (b) goods and / or services provided in relation to food and beverages, outdoor catering, beauty treatment, health services, c

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What is the time limit for taking ITC?

Question 28 – Draft-Bills-Reports – Input Tax Credit – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 28 – Q 28. What is the time limit for taking ITC? Ans. As per Section 16 (15) of the MGL, ITC cannot be taken beyond the month of September of the following FY to which invoice pertains or date of filing of annual return, whichever is earlier. The underlying reasoning for this restriction is that no change in return is permitted after September of next FY. If annual return is fi

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Who will get the ITC where goods have been delivered to a person other than taxable person (‘bill to’- ‘ship to’ scenarios)?

Question 27 – Draft-Bills-Reports – Input Tax Credit – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 27 – Q 27. Who will get the ITC where goods have been delivered to a person other than taxable person ( bill to – ship to scenarios)? Ans. As per explanation clause to section 16(11) of the MGL, for this purpose of receiving the goods, it would be deemed that the taxable person has received the goods when the goods have been delivered to a third party on the direction of such ta

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Where the goods against an invoice are received in lots or instalments, how will a registered taxable person be entitled to ITC?

Where the goods against an invoice are received in lots or instalments, how will a registered taxable person be entitled to ITC? – Question 26 – Draft-Bills-Reports – Input Tax Credit – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 26 – Q 26. Where the goods against an invoice are received in lots or instalments, how will a registered taxable person be entitled to ITC? Ans. As per proviso to section 16(11) of the MGL, the registered taxable person shall be entitled to the credit

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What are the conditions necessary for obtaining ITC?

Question 25 – Draft-Bills-Reports – Input Tax Credit – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 25 – Q 25. What are the conditions necessary for obtaining ITC? Ans. As per Section 16(11) of the MGL, following four conditions are stipulated: (a) The registered taxable person should be in possession of tax paying document issued by a supplier; (b) The taxable person must have received the goods and / or services; (c) The tax charged on such supply has been actually paid to t

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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, will ITC be allowed in such cases?

Question 24 – Draft-Bills-Reports – Input Tax Credit – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 24 – Q 24. Where the registered taxable person has claimed depreciation on the ta

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A Taxable person is in the business of information technology. He buys a motor vehicle for use of his Executive Directors. Can he avail the ITC in respect of GST paid on purchase of such motor vehicle?

A Taxable person is in the business of information technology. He buys a motor vehicle for use of his Executive Directors. Can he avail the ITC in respect of GST paid on purchase of such motor vehicle? – Question 23 – Draft-Bills-Reports – Input Tax Credit – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 23 – Q 23. A Taxable person is in the business of information technology. He buys a motor vehicle for use of his Executive Directors. Can he avail the ITC in respect of GST paid

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Which of the following is included for computation of taxable supplies for the purpose of availing credit: (a) Zero-rated supplies; (b) Exempt supplies; (c) Both?

Which of the following is included for computation of taxable supplies for the purpose of availing credit: (a) Zero-rated supplies; (b) Exempt supplies; (c) Both? – Question 20 – Draft-Bills-Reports – Input Tax Credit – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 20 – Q 20. Which of the following is included for computation of taxable supplies for the purpose of availing credit: (a) Zero-rated supplies; (b) Exempt supplies; (c) Both? Ans. Zero rated supplies. – Statutory Provi

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Whether principal has to reverse the input tax credit on inputs which have not been received back from the job worker within 180 days?

Question 19 – Draft-Bills-Reports – Input Tax Credit – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 19 – Q 19. Whether principal has to reverse the input tax credit on inputs which have not been received back from the job worker within 180 days? Ans. Yes, the principal has to reverse the credit along with interest on inputs which have not been received back from job worker within 180 days but he can reclaim the credit on receipt of inputs. – Statutory Provisions, Acts, Rules,

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When shall a taxable person be not entitled to take input tax credit under sub-section (2), (2A) or sub-section (3) of Section 16 in respect of any supply of goods and / or services to him?

Question 16 – Draft-Bills-Reports – Input Tax Credit – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 16 – Q 16. When shall a taxable person be not entitled to take input tax credit under sub-section (2), (2A) or sub-section (3) of Section 16 in respect of any supply of goods and / or services to him? Ans. As per section 16(4) of the MGL, he cannot avail ITC after the expiry of one year from the date of issue of tax invoice relating to such supply. – Statutory Provisions, Acts,

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