Input Tax Credit under GST
By: –
Goods and Services Tax – GST
Dated:- 2-12-2017<\/p>\n
Goods and Service Tax (GST) in India provides for seamless and continuous flow of input tax credit (ITC). In the earlier tax regime, cascading of tax is significant due to non-availability of ITC at various stages. Credit of taxes like CST, Entry Tax, and Luxury Tax was not available which became cost of the goods\/services. Credit of VAT was not available to manufacturers and service providers and CENVAT credit and credit of Additional Duty of Customs\/Countervailing Duty was unavailable to VAT dealers unless registered as First\/Second stage dealers.
\n\tThe tax not available as credit became part of the cost which adds to the price of goods\/service. Ultimate burden of taxes not available as credit fell on the end consumer.
\n\tUnder GST, ITC will be available for tax paid at all the stages of supply paid in course or furtherance of business. ITC will flow uninterruptedly not only for intra-Stat<\/p>\n
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Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n iddot; IGST = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n filed before the month of September then no ITC can be claimed for the invoice relating to such FY after filing of GSTR-9. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n med in the F.Y. and balance 50% in subsequent F.Y. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ort that are used for making outward supply of goods or services or both and includes such foundation and structural supports but excludes- (i) land, building or any other civil structures; (ii) telecommunication towers; and (iii) pipelines laid outside the factory premises. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n may lead to denial of ITC in hands of the recipient. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" Input Tax Credit under GSTBy: – Goods and Services Tax – GSTDated:- 2-12-2017 Goods and Service Tax (GST) in India provides for seamless and continuous flow of input tax credit (ITC). In the earlier tax regime, cascading of tax is significant due to non-availability of ITC at various stages. Credit of taxes like CST, Entry … Continue reading “Input Tax Credit under GST”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-9264","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/9264","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=9264"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/9264\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9264"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9264"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9264"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\n * · CGST
\n * · SGST
\n * · UTGST
\nCGST
\n * · CGST
\n * · IGST
\nSGST
\n * · SGST
\n * · IGST
\nUTGST
\n * · UTGST
\n * · IGST
\n3. Conditions for claiming ITC
\nITC can be claimed by the registered person (RP) if all the following conditions are satisfied:-
\na. RP possesses tax invoice\/debit note\/other taxpaying document, issued by a registered supplier;
\nb. Goods\/services shall have been received by him.
\n * If goods are delivered on his direction [Bill to ship to scenario] to a third person it would be deemed to have been received by him.
\n * Where the goods are received in lots or installments, the registered taxable person shall be entitled to the credit upon receipt of the last lot or installment.
\nc. The tax charged on supply has been actually paid to the government either in cash or through utilization of input tax credit;
\n\tThe recipient of supply to pay to the supplier the value of supply along with the tax wit<\/p>\n
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\n5. Restriction on claiming ITC
\n\tITC to the extent of taxes paid on goods and \/ or services used partly for the purpose of any business for other purposes shall be permitted to the extent of ITC attributable to purpose of business.
\n ITC to the extent of taxes paid on goods and \/ or services is used for taxable supplies including zero rated supplies and partly for exempted [1] supplies shall be permitted only to the extent they are used in taxable supplies and zero-rated supplies only.
\n Banking company or financial institution engaged in supply of service by way of accepting deposits, extending loans or advances may claim ITC in respect of taxes paid partly for taxable supply and partly for non taxable supplies in either of the following manner:
\n a. to the extent attributable to taxable supplies; or
\n b. 50% of eligible ITC on inputs, capital goods and input se<\/p>\n
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\n· 100% ITC can be claimed if not relevant taxes not claimed as depreciation under IT Act, 1961.
\nElectronic Credit Ledger
\n· No such concept
\n· ECRL required to be maintained for crediting and utilizing ITC.
\nReversal of Credit
\n· Reversal of ITC provided for in certain circumstances.
\n· No such concept. Cases demanding reversal to be added to the output GST.
\nPayment to Appropriate Government
\n·Credit claim and utilization not dependent upon payment of tax by the supplier.
\n· ITC claim dependent upon payment of tax by the supplier. Failure to do so disentitles ITC claim to the recipient.
\n7. Negative list of ITC
\nITC on following items cannot be availed:
\na. motor vehicles, except when supplied in the usual course of business or are used for providing taxable services of –
\n i. further supply of such vehicles or conveyances ; or
\n ii. transportation of passengers; or
\n iii. Imparting t<\/p>\n
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\nf. Tax paid under Composition levy;
\ng. Supply made by a non-resident taxable person except on goods imported by him;
\nh. Supply of goods\/service for personal consumption;
\ni. Goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples;
\nj. Any tax paid in accordance with the provisions of sections 74, 129 and 130
\n8. Matching of ITC:
\n The matching, claim, reversal and reclaim of ITC a fool proof mechanism to tap revenue leakage in hands of the Government.
\n Supplier to furnish details in GSTR-1 by 10th of the subsequent month. Details of the same to be communicated by GSTN to the recipient in GSTR-2A.
\n On the basis of GSTR-2A the recipient shall verify, validate, modify, delete or i<\/p>\n
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\n If the discrepancy is not rectified the excess claim of ITC shall be added to the output liability of the recipient.
\n The person claiming excess credit has to bear interest.
\n Cases give rise to discrepancy-
\n * Reversal \/ Mismatch of ITC;
\n * Excess claim of ITC by recipient;
\n * Outward supply not declared by the supplier;
\n * Duplication of claim of ITC by recipient
\nA person who has not furnished a valid return shall not be allowed to utilize ITC.
\nThe recipient can avail the ITC by filing a return but he cannot utilize the same unless he has filed the valid return. The recipient can re-claim the reversed ITC after the supplier has paid the taxes due from him.
\n10. Conclusion:
\nITC allowed in GST is quite liberal and elaborate as compared to existing laws. An effort has been made to permit ITC in respect of all taxes paid in relation to business expenses except those of personal nature. The ITC self assessed in the return wou<\/p>\n
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