Input Tax Credit under the revised GST Law
By: – Sanjeev Singhal
Goods and Services Tax – GST
Dated:- 16-12-2016<\/p>\n
There is drastic change in the Capital Goods definition under Revised GST Law from GST Law. Under the GST law definition was very exhaustive though under the Revised GST law It is quite simple. Under GST law, Capital goods was defined under Section- 2(20) and Under CCR, 2004 the same was provided under Rule 2(a) and both the definition were almost same except some words here and there. But new definition under section 2(19) of Revised GST law is simple and rational. Now, We can go through all definition related to Input tax Credit under Revised GST Law to understand the input tax credit in detail.
\nDefinition of Capital Goods, Input and Input Services under revised GST Law
\nCapital Goods -Sec. 2(19)
\n“Capital good” means goods , the value of which is capitalized in the books of accounts of person claiming the credit which are used or intended to be used in th<\/p>\n
= = = = = = = =<\/p>\n
Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n er specified in Sec. 44 [ Levy of Tax, Interest and penalty] and the said amount shall be credited to his ECL [electronic credit ledger]. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ave the option of either accept the provision as specified in 2[B] above or take 50 of the eligible credit on input, capital goods and input services. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n mmediately proceeding the date of grant of registration. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n edit of input sent for job work provided the input after job work has been received back within one year from the date of sent out. ITC can be claimed even if the goods directly sent to job worker. One year shall be computed from the date of receipt of material by Job worker. If the goods have not been returned within the stipulated period the same shall be treated as supply to job worker from the date of goods sent out. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n is located in different states. ………………………………..> Under SGST Act. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n he can avail the credit on input and input contained in semi finished goods and finished goods on the date immediately proceeding the date from which he becomes liable to pay tax. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" Input Tax Credit under the revised GST LawBy: – Sanjeev SinghalGoods and Services Tax – GSTDated:- 16-12-2016 There is drastic change in the Capital Goods definition under Revised GST Law from GST Law. Under the GST law definition was very exhaustive though under the Revised GST law It is quite simple. Under GST law, Capital … Continue reading “Input Tax Credit under the revised GST Law”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-2029","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/2029","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2029"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/2029\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2029"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2029"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2029"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\nInput tax credit for pipe line and telephone tower fixed to earth by foundation and structural support shall be available as follows:
\n1\/3 in the first year when goods received
\n1\/3 in the next year
\nThe balance in subsequent financial year
\nNo person can claim credit but subject to provision of sec. 36, except the following in possession:;
\nInvoice or debit note
\nReceived the goods or services
\nTax charged on such supply has been paid to Government
\nPerson has filed the return u\/s 34
\nWhere the goods are received in installment or lots, ITC shall be available at the time receiving of final installment or lot.
\nRecipient shall make the payment to supplier within three months from the date of invoice otherwise the ITC taken shall be added to the output tax liability with interest.
\nWhere the RTP has claimed depreciation as per Income Tax Act on cost <\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nE] Despite the provision of Sec. 16[1] and Section 18 [1][2][3][4] ITC shall not be available on the following;
\n a] motor vehicle other conveyance except the following
\n i] for making the following taxable supplies further supply of such vehicle or conveyance transporting of passenger imparting training on driving , flying ,navigating such vehicle or conveyance.
\nii] for transportation of goods
\nb] supply of goods or service, namely
\nFood and beverage, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, except when such inward supply of goods and services is used for output taxable supply of the same category of goods and services.
\nMembership of club, health and fitness services
\nRent a cab, life insurance, health insurance
\nTravel benefit extended to employee on vocation such as leave or home travel con<\/p>\n
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\nWhere the RTP ceases to pay tax under sec.9 , will be entitle to claim ITC on input, semi finished and finished goods and capital goods on immediately proceeding the day on which he is liable to pay tax. Provided that credit on capital goods shall be reduced by percentage point as prescribed.
\nWhere an exempt supply of goods and services by RTP becomes taxable, will be entitle to claim ITC on input, semi finished and finished goods and capital goods on immediately proceeding the day on which he is liable to pay tax. Provided that credit on capital goods shall be reduced by percentage point as prescribed
\nRTP can not claim input tax credit under the above said sub sections after the expiry of one year from the date of invoice.
\nWhere there is change in the constitution of RTP on account of sale, merger, demerger, amalgamation , lease or transfer of the business, in such cases RTP shall be allowed to transfer the unutilized input <\/p>\n
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\nPrincipal subject to such condition as prescribed, entitled to take credit of ITC on capital goods sent to job worker. Credit shall be valid if such goods have been received back within three years of being sent out. ITC can be taken even if the capital goods directly received by job worker. If the capital goods have not been returned within the stipulated period the same shall be treated as supply to job worker from the date of capital goods sent out.
\nThe aforesaid period of one year or three year shall not be applied in case of moulds, dies, jigs and fixture, or to<\/p>\n
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\nISD can distribute the ITC subject to the following :
\nonly on prescribed document containing the details as prescribed.
\nThe amount of credit distributed can not exceed the amount of credit
\nITC can be distributed only to that recipient eligible.
\nCan be distributed to attributable recipient. If more than one recipient, it shall be on pro rata based on the turnover of the state, of the relevant period. Recipient should be operational in that relevant period.
\nManner of recovery of credit Distributed in excess [Sec-22]
\nWhere the ISD distribute any credit without following the provisions of Sec. 21 resulting in excess distribution of credit , the same shall be recovered from such recipient along with interest, and the provision of sec. 66 or 67 [demand and recovery] shall apply mutatis mutandis for such recovery.
\nFAQ ON INPUT TAX CREDIT
\nQ. Can GST paid on reverse charge be considered as input ta<\/p>\n
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\nQ. Weather the principal is eligible to take input on input sent to job worker?
\nA. Yes. As prescribed in sec. 20[1].
\nQ. What is the recovery mechanism for wrongly availed credit.
\nA. As per Sec.19 , the same shall be recovered from RTP as per the provision.
\n Reply By JAIPRAKASH RUIA as =
\nONE
\nRecipient shall make the payment to supplier within three months from the date of invoice otherwise the ITC taken shall be added to the output tax liability with interest.
\nPayment of tax part of invoice or full invoice amount ?
\nIf full Invoice amount, than what about part payment or 10% retention\/PBG is kept.
\nTWO
\nIs it not contradictory that again the Definition of Capital Goods made very vide by saying "used or intended to be used in the course or furtherance of business".
\nand restricted as under in <\/p>\n
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