GST – Input Tax Credit – Draft Rules 31-3-2017
GST
Dated:- 2-4-2017
GST – Input Tax Credit – Draft Rules 31-3-2017
\n
\n=============
\nDocument 1
\nCHAPTER-
\nInput Tax Credit
\n1.
\n(1)
\nDocumentary requirements and conditions for claiming input tax credit
\nThe input tax credit shall be availed by a registered person, including the Input Service
\nDistributor, on the basis of any of the following documents, namely:-
\n(2)
\n(a)
\n(b)
\n(c)
\n(d)
\n(e)
\n(f)
\nan invoice issued by the supplier of goods or services or both in accordance with
\nthe provisions of section 31;
\na debit note issued by a supplier in accordance with the provisions of section 34;
\na bill of entry;
\nan invoice issued in accordance with the provisions of clause (f) of sub-section (3)
\nof section 31;
\na document issued by an Input Service Distributor in accordance with the
\nprovisions of sub-rule (1) of rule invoice.7;
\na document issued by an Input Service Distributor, as prescribed in clause (g) of
\nsub-rule (<\/p>\n
= = = = = = = =<\/p>\n
Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n d = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n or shall distribute input tax credit in the manner and subject = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n in a State other than that of the Input Service = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n other reason for any of the recipients, including that it was distributed to a = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n e becomes liable to pay = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n rger, de-merger, amalgamation, lease or = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n 'T4'; = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n qual to \u2018D\u00e2\u201a\u0081' and 'D2' shall be added to the output tax liability of the registered = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n certain cases = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n he rate = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n contained in semi- = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n allan = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" GST – Input Tax Credit – Draft Rules 31-3-2017 GSTDated:- 2-4-2017GST – Input Tax Credit – Draft Rules 31-3-2017 ============= Document 1 CHAPTER- Input Tax Credit 1. (1) Documentary requirements and conditions for claiming input tax credit The input tax credit shall be availed by a registered person, including the Input Service Distributor, on … Continue reading “GST – Input Tax Credit – Draft Rules 31-3-2017”<\/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-2561","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/2561","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=2561"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/2561\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2561"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2561"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2561"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\nof in FORM GSTR-2 for the month immediately following the period of one hundred and
\neighty days from the date of issue of invoice.
\n(2) The amount of input tax credit referred to in sub-rule (1) shall be added to the output tax
\nliability of the registered person for the month in which the details are furnished.
\n(3) The registered person shall be liable to pay interest at the rate notified under sub-section (1)
\nof section 50 for the period starting from the date of availing credit on such supplies till the
\ndate when the amount added to the output tax liability, as mentioned in sub-rule (2), is paid.
\n3. Claim of credit by a banking company or a financial institution
\nA banking company or a financial institution, including a non-banking financial company,
\nengaged in supply of services by way of accepting deposits or extending loans or advances that
\nchooses not to comply with the provisions of sub-section (2) of section 17, in accordance with
\nthe option permitted under sub-sect<\/p>\n
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\nto the conditions specified below-
\n(a) the input tax credit available for distribution in a month shall be distributed in
\nthe same month and the details thereof shall be furnished in FORM GSTR-6 in
\naccordance with the provisions of Chapter – (Return Rules);
\n–
\n(b) the Input Service Distributor shall, in accordance with the provisions of clause
\n(d), separately distribute the amount in-eligible as input tax credit under the provisions
\nof sub-section (5) of section 17 and the amount eligible as input tax credit;
\n(c) the input tax credit on account of central tax, State tax, Union territory tax and
\nintegrated tax shall be distributed separately in accordance with the provisions of clause
\n(d);
\n(d) the input tax credit that is required to be distributed in accordance with the
\nprovisions of clause (d) and (e) of sub-section (2) of section 20 to one of the recipients
\n'Ri', whether registered or not, from amongst the to<\/p>\n
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\nDistributor, be distributed as integrated tax and the amount to be so distributed
\nshall be equal to the aggregate of the amount of input tax credit of central tax and
\nState tax that qualifies for distribution to such recipient in accordance with clause
\n(d);
\n(g) The Input Service Distributor shall issue an ISD invoice, as prescribed in sub-rule (1)
\nof rule invoice-7, clearly indicating in such invoice that it is issued only for distribution
\nof input tax credit.
\n(h) The Input Service Distributor shall issue an ISD credit note, as prescribed in sub-rule
\n(1) of rule Invoice-7, for reduction of credit in case the input tax credit already distributed
\ngets reduced for any reason.
\n(i) Any additional amount of input tax credit on account of issuance of a debit note to an
\nInput Service Distributor by the supplier shall be distributed in the manner and subject to
\nthe conditions specified in clauses (a) to (g) and the amount attributable<\/p>\n
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\nwrong recipient by the Input Service Distributor, the process prescribed in clause (j) of
\nsub-rule (1) shall, mutatis mutandis apply for reduction of credit.
\n(3) Subject to sub-rule (2), the Input Service Distributor shall, on the basis of the ISD credit
\nnote specified in clause (h) of sub-rule (1), issue an ISD Invoice to the recipient entitled to such
\ncredit and include the ISD credit note and the ISD Invoice in the return in FORM GSTR-6 for
\nthe month in which such credit note and invoice was issued.
\n5.
\nManner of claiming credit in special circumstances
\n(1) Input tax credit claimed in accordance with the provisions of sub-section (1) of section 18
\non the inputs lying in stock or inputs contained in semi-finished or finished goods lying in
\nstock, or the credit claimed on capital goods in accordance with the provisions of clauses (c)
\nand (d) of the said sub-section, shall be subject to the follo<\/p>\n
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\ntax under the provisions of this Act, in the case of a claim under clause (a) of sub-
\nsection (1) of Section 18,
\non the day immediately preceding the date of grant of registration, in the case of a
\nclaim under clause (b) of sub-section (1) of Section 18,
\non the day immediately preceding the date from which he becomes liable to pay
\ntax under section 9, in the case of a claim under clause (c) of sub-section (1) of
\nSection 18,
\non the day immediately preceding the date from which supplies made by the
\nregistered person becomes taxable, in the case of a claim under clause (d) of sub-
\nsection (1) of Section 18.
\n(d) The details furnished in the declaration under clause (c) shall be duly certified by a
\npracticing chartered account or cost accountant if the aggregate value of claim on account
\nof central tax, State tax and integrated tax exceeds two lakh rupees.
\n(e) The input tax credit claimed in accordance with clauses (c) and (d) of sub-section (1) of
\nsec<\/p>\n
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\ntransfer of business has been done with a specific provision for transfer of liabilities.
\n(3) The transferee shall, on the Common Portal, accept the details so furnished by the transferor
\nand, upon such acceptance, the un-utilized credit specified in FORM GST ITC-02 shall be
\ncredited to his electronic credit ledger.
\n4
\n(4) The inputs and capital goods so transferred shall be duly accounted for by the transferee in
\nhis books of account.
\n7. Manner of determination of input tax credit in certain cases and reversal thereof
\n(1) The input tax credit in respect of inputs or input services, which attract the provisions of
\nsub-sections (1) or (2) of section 17, being partly used for the purposes of business and partly
\nfor other purposes, or partly used for effecting taxable supplies including zero rated supplies
\nand partly for effecting exempted supplies, shall be attributed to the purposes of business or for
\neffecting taxable supplies in the <\/p>\n
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\n(g) \u2018T\u00e2\u201a\u0081', 'T\u00e2\u201a\u201a', 'T3' and \u2018T4' shall be determined and declared by the registered person at the
\ninvoice level in FORM GSTR-2;
\n(h) Input tax credit left after attribution of input tax credit under clause (g) shall be called
\ncommon credit, be denoted as \u2018C2' and calculated as:
\nC2=C1- T4;
\n(i) The amount of input tax credit attributable towards exempt supplies, be denoted as \u2018D\u00e2\u201a\u0081' and
\ncalculated as:
\nwhere,
\nD1= (E\u00c3\u00b7F) \u00c3\u2014 C2
\n'E' is the aggregate value of exempt supplies, that is, all supplies other than taxable and zero
\nrated supplies, during the tax period, and
\n'F' is the total turnover of the registered person during the tax period:
\nProvided that where the registered person does not have any turnover during the said tax period
\nor the aforesaid information is not available, the value of \u2018E\/F' shall calculated by taking values
\nof 'E' and 'F' of the last tax period for which details of such turnover are available, previ<\/p>\n
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\nperson:
\nProvided that if the amount of input tax relating to inputs or input services which have been
\nused partly for purposes other than business and partly for effecting exempt supplies has been
\nidentified and segregated at invoice level by the registered person, the same shall be included
\nin \u2018T\u00e2\u201a\u0081 and \u2018T\u00e2\u201a\u201a' respectively, and the remaining amount of credit on such input or input services
\nshall be included in 'T4'.
\n(2) The input tax credit determined under sub-rule (1) shall be calculated finally for the
\nfinancial year before the due date for filing the return for the month of September following
\nthe end of the financial year to which such credit relates, in the manner prescribed in the said
\nsub-rule and,
\n(a) where the aggregate of the amounts calculated finally in respect of \u2018D\u00e2\u201a\u0081' and 'D2' exceeds
\nthe aggregate of the amounts determined under sub<\/p>\n
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\n(1) Subject to the provisions of sub-section (3) of section 16, the input tax credit in respect of
\ncapital goods, which attract the provisions of sub-sections (1) and (2) of section 17, being partly
\nused for the purposes of business and partly for other purposes, or partly used for effecting
\ntaxable supplies including zero rated supplies and partly for effecting exempt supplies, shall be
\nattributed to the purposes of business or for effecting taxable supplies in the following manner,
\nnamely,-
\n(a) the amount of input tax in respect of capital goods used or intended to be used
\nexclusively for non-business purposes or used or intended to be used exclusively for
\neffecting exempt supplies shall be indicated in FORM GSTR-2 and shall not be credited
\nto his electronic credit ledger;
\n(b) the amount of input tax in respect of capital goods used or intended to be used
\nexclusively for effecting taxable supplies including zero-rated supplies shall be indicated
\nin FORM GST<\/p>\n
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\nof five percentage points for every quarter or part thereof shall be added to the aggregate
\nvalue 'T.';
\n(e) the amount of input tax credit attributable to a tax period on common capital goods
\nduring their residual life, be denoted as 'Tm' and calculated as:-
\nTm= Te\u00c3\u00b760
\n(f) the amount of input tax credit, at the beginning of a tax period, on all common
\ncapital goods whose residual life remains during the tax period, be denoted as 'Tr'
\nand shall be the aggregate of \u2018Tm' for all such capital goods.
\n(g) the amount of common credit attributable towards exempted supplies, be denoted
\nas 'Te', and calculated as:
\nTe= (E\u00c3\u00b7F) x Tr
\nwhere,
\n'E' is the aggregate value of exempt supplies, that is, all supplies other than taxable and zero
\nrated supplies, during the tax period, and
\n'F' is the total turnover of the registered person during the tax period:
\n7
\nProvided that where the registered person does not have any turnover during the said tax period
\nor the aforesaid <\/p>\n
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\nfinished and finished goods lying in stock, and capital goods lying in stock, for the purposes of
\nsub-section (4) of section 18 or sub-section (5) of 29, shall be determined in the following
\nmanner namely,-
\n(a) For inputs lying in stock, and inputs contained in semi-finished and finished goods
\nlying in stock, the input tax credit shall be calculated proportionately on the basis of
\ncorresponding invoices on which credit had been availed by the registered taxable
\nperson on such input.
\n(b) For capital goods lying in stock the input tax credit involved in the remaining residual
\nlife in months shall be computed on pro-rata basis, taking the residual life as five years;
\nIllustration
\nCapital goods have been in use for 4 years, 6 month and 15 days.
\nThe residual remaining life in months = 5 months ignoring a part of the month
\nInput tax credit taken on such capital goods=\u00c3\u2021
\nInput tax credit attributable to remaining residual life=C multiplied by 5\/60
\n(2) The <\/p>\n
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\nissued by the principal, including where the inputs or capital goods are sent directly to job-
\nworker.
\n(2)
\nThe challan issued by the principal to the job worker shall contain the details specified
\nin rule Invoice.8:
\n(3) The details of challans in respect of goods dispatched to a job worker or received from a
\njob worker during a tax period shall be included in FORM GSTR-1 furnished for that period.
\n(4) If the inputs or capital goods are not returned to the principal within the time stipulated in
\nsection 143, the challan issued under sub-rule (1) shall be deemed to be an invoice for the
\npurposes of this Act.
\nExplanation.- For the purposes of this Chapter,-
\n(1) “capital goods\u201d shall include \u201cplant and machinery” as defined in the Explanation to section
\n17;
\n(2) for determining the value of an exempt supply as referred to in sub-section (3) of section
\n17:-
\n(a) the value of land and building shall be taken as the same as adopted for the purpose of
\npaying st<\/p>\n
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