Basic Concepts of Input Tax Credit, availment, utilization and reversal of input tax credit.
In every value added taxation structure, Input tax credit remains the backbone of such tax structures as it removes the cascading effect of taxes. In GST also being a value added tax, it is the intention of the lawmakers to allow seamless flow of credit in the supply chain and remove cascading effect of taxes.
There are various problematic areas which will make the road of GST difficult for the assessees to ride upon. We have summarized some of the problems in the draft Model GST Law in this article.
Transitional provisions-under GST in Indiasanjay gupta
Coming July,1 2017 GST will be implemented in India. Transitional phase will be very painful for Registered dealers. This presentation deals with the Transitional provision under GST Act in India
This article comprises of basic compliances which every assessee shall be liable to comply with and in case, it defaults in complying with the same, he shall be subject to penalty and interest.
CA Ashish Garg
Gst Registration Process By Ca. Rajat MohanGst Sms
Check out the latest updates on Goods and Services Tax (GST) in India. Get breaking news, Latest Breaking News on Goods and Services Tax (GST), Daily News Analysis and Services Tax (GST) at GSTSMS.in.
OBJECTIVE
Goods and Services Tax (GST) is the Indirect Tax levied in India introduced in July 2017 which was one of the most important reforms in the Indian Economy. GST subsumed various indirect laws in the country and the led to the formation of a common national market. In this webinar, we shall examine and understand the various registrations under the GST Law.
There are various problematic areas which will make the road of GST difficult for the assessees to ride upon. We have summarized some of the problems in the draft Model GST Law in this article.
Transitional provisions-under GST in Indiasanjay gupta
Coming July,1 2017 GST will be implemented in India. Transitional phase will be very painful for Registered dealers. This presentation deals with the Transitional provision under GST Act in India
This article comprises of basic compliances which every assessee shall be liable to comply with and in case, it defaults in complying with the same, he shall be subject to penalty and interest.
CA Ashish Garg
Gst Registration Process By Ca. Rajat MohanGst Sms
Check out the latest updates on Goods and Services Tax (GST) in India. Get breaking news, Latest Breaking News on Goods and Services Tax (GST), Daily News Analysis and Services Tax (GST) at GSTSMS.in.
OBJECTIVE
Goods and Services Tax (GST) is the Indirect Tax levied in India introduced in July 2017 which was one of the most important reforms in the Indian Economy. GST subsumed various indirect laws in the country and the led to the formation of a common national market. In this webinar, we shall examine and understand the various registrations under the GST Law.
Input tax credit & matching with return under gstNikhil Malaiyya
Input tax credit under GST, Matching with return under GST, Annual Return, Final Return, Monthly return, late filing fees under GST, Transitional Provision
Input Tax Credit (ITC) in GST with Practical ExamplesGSTIndia.biz
Learn everything you should know about Input Tax Credit (ITC) in GST by Ashu Dalmia (GST Consultant, Trainer & Author)
Credit is backbone of whole GST for all businesses and without proper understanding of input, organisation can be badly hit.
What do you think are the challenging issues, immediately affecting a person covered under earlier laws?
The objective of this presentation is to impart understanding on various issues which a business unit/service provider shall face in this change over from earlier law to GST.
Enrolment of existing taxpayers under GSTGST Law India
Greetings from GST Law India!
Goods and Service Tax (GST) is now a near reality and government is making fast moves for implementing it from the proposed date of 1st of April 2017.
W.e.f. 08.11.2016, the GST Network has initiated GST migration/ enrollment proceedings of existing taxpayers under the current Indirect tax regime to the GST portal.
Please find attached herewith a brief presentation on the process of migration/ enrollment as well as the paramount considerations during the whole migration activity.
It is noteworthy, that paramount consideration at this juncture must be to determine the nature of registration and optimum locations for registration in terms of present and future business transactions as separate registrations shall be required at each state from where supply of goods/ services are being made.
If you have any Query you can contact Us
Mail id:- ca.sanjiv.nanda@gmail.com
Youtube Channel :- https://www.youtube.com/channel/UCmmx2GFXeoF-DNtNjwnpYJA
Website :- http://www.sanjivnanda.com/
Facebook link :- https://www.facebook.com/ca.sanjivnanda919/
Twitter :- https://twitter.com/
Composition levy GST ( Composition Scheme GST )CA-Amit
Only taxable persons whose ‘aggregate turnover’ does not exceed Rs. 50 lacs in a financial year will be eligible to opt for payment of tax under the composition scheme.As per Section 16, Goods and/or services on which composition tax has been paid under Section 8 is not eligible for input tax credit.
Introduction
This PPT explains the complete procedure regarding the GST registration in India. It also explains the complete registration rules as per GST act. This presentation also covers practical aspects to the GST registration in India. If you want to get the GST registration online, then you are at the right place.
Brief Registration rules
1. Every person shall be liable to be registered under GST if the total turnover (including exempt supplies) crosses the of Rs.20 lakh in a financial year. However, for north eastern states, the turnover limit is Rs.10 lakh.
2. To be eligible for GST registration, the person must have a valid PAN number (passport in case of non resident).
3. The GST registration is taken from the place where supply is executed. E.g. Mr. A is selling goods from his godown in Laxmi Nagar Delhi, and then he is liable to take registration from Laxmi Nagar, Delhi.
4. Turnover for registration is to be calculated on all India bases and not on state wise.
E.g. if you have business one at Delhi and another is in Uttar Pradesh, then for GST registration the total combine turnover of Delhi and UP is to be taken.
5. Person must apply for GST registration within 30 days of becoming liable for GST registration.
6. If a person wants to add a branch outside the state, then he shall need to apply for another GST registration in the respective state.
7. A person registered under GST voluntarily shall need to comply with GST like any other registered person.
Mandatory Registration
Further, there are another categories of taxpayers who are required to take GST registration in India irrespective of the turnover, i.e. even if the person has Re.1 turnover, he needs to get GST registration if he falls under the categories of mandatory registration.
Kindly read the presentation to know the complete information and procedure about the GST registration.
About the Author
This presentation has been prepared by CA Paras Mehra, who is professionally associated with www.hubco.in, an online legal website which deals in online GST registration, GST return filing, Company registration, Nidhi Company registration, Compliances etc.
Input tax credit & matching with return under gstNikhil Malaiyya
Input tax credit under GST, Matching with return under GST, Annual Return, Final Return, Monthly return, late filing fees under GST, Transitional Provision
Input Tax Credit (ITC) in GST with Practical ExamplesGSTIndia.biz
Learn everything you should know about Input Tax Credit (ITC) in GST by Ashu Dalmia (GST Consultant, Trainer & Author)
Credit is backbone of whole GST for all businesses and without proper understanding of input, organisation can be badly hit.
What do you think are the challenging issues, immediately affecting a person covered under earlier laws?
The objective of this presentation is to impart understanding on various issues which a business unit/service provider shall face in this change over from earlier law to GST.
Enrolment of existing taxpayers under GSTGST Law India
Greetings from GST Law India!
Goods and Service Tax (GST) is now a near reality and government is making fast moves for implementing it from the proposed date of 1st of April 2017.
W.e.f. 08.11.2016, the GST Network has initiated GST migration/ enrollment proceedings of existing taxpayers under the current Indirect tax regime to the GST portal.
Please find attached herewith a brief presentation on the process of migration/ enrollment as well as the paramount considerations during the whole migration activity.
It is noteworthy, that paramount consideration at this juncture must be to determine the nature of registration and optimum locations for registration in terms of present and future business transactions as separate registrations shall be required at each state from where supply of goods/ services are being made.
If you have any Query you can contact Us
Mail id:- ca.sanjiv.nanda@gmail.com
Youtube Channel :- https://www.youtube.com/channel/UCmmx2GFXeoF-DNtNjwnpYJA
Website :- http://www.sanjivnanda.com/
Facebook link :- https://www.facebook.com/ca.sanjivnanda919/
Twitter :- https://twitter.com/
Composition levy GST ( Composition Scheme GST )CA-Amit
Only taxable persons whose ‘aggregate turnover’ does not exceed Rs. 50 lacs in a financial year will be eligible to opt for payment of tax under the composition scheme.As per Section 16, Goods and/or services on which composition tax has been paid under Section 8 is not eligible for input tax credit.
Introduction
This PPT explains the complete procedure regarding the GST registration in India. It also explains the complete registration rules as per GST act. This presentation also covers practical aspects to the GST registration in India. If you want to get the GST registration online, then you are at the right place.
Brief Registration rules
1. Every person shall be liable to be registered under GST if the total turnover (including exempt supplies) crosses the of Rs.20 lakh in a financial year. However, for north eastern states, the turnover limit is Rs.10 lakh.
2. To be eligible for GST registration, the person must have a valid PAN number (passport in case of non resident).
3. The GST registration is taken from the place where supply is executed. E.g. Mr. A is selling goods from his godown in Laxmi Nagar Delhi, and then he is liable to take registration from Laxmi Nagar, Delhi.
4. Turnover for registration is to be calculated on all India bases and not on state wise.
E.g. if you have business one at Delhi and another is in Uttar Pradesh, then for GST registration the total combine turnover of Delhi and UP is to be taken.
5. Person must apply for GST registration within 30 days of becoming liable for GST registration.
6. If a person wants to add a branch outside the state, then he shall need to apply for another GST registration in the respective state.
7. A person registered under GST voluntarily shall need to comply with GST like any other registered person.
Mandatory Registration
Further, there are another categories of taxpayers who are required to take GST registration in India irrespective of the turnover, i.e. even if the person has Re.1 turnover, he needs to get GST registration if he falls under the categories of mandatory registration.
Kindly read the presentation to know the complete information and procedure about the GST registration.
About the Author
This presentation has been prepared by CA Paras Mehra, who is professionally associated with www.hubco.in, an online legal website which deals in online GST registration, GST return filing, Company registration, Nidhi Company registration, Compliances etc.
Under the upcoming GST ( Goods and service tax) environment in INDIA the migration of registered dealers under various State Vat to GST network has started. It is the duty of every dealer to migrate. This book is a handy guide for migration related information.
Find out the detailed explanation of the provisions relating to Input Tax Credit under the dual GST Law from the presentation . Give it a read and we would love to know your feedback!
Budget Analysis of Union Budget 2017 in relation to amendments made in Income Tax Act, 1961 and Service Tax. A comprehensive and detailed analysis in simple language for better understanding of every class of readers.
Impact of GST on entertainment industry and media sector Shashwat Tulsian
India's media and entertainment market which is the 5th largest in the world .GST will do more good than harm for the entertainment industry on the whole prots for multiplexes are likely to go up
The debate over the implementation of Goods and Services Tax (GST) has been tiresomely long.
GST is a critical reform in spurring growth in the Indian economy.
When it is introduced, GST is expected to make the tax system simpler and will also help in increased compliance, boost tax revenues, reduce the tax outflow in the hands of the consumers and make exports competitive. The new government will hopefully set forth a roadmap for the implementation of GST soon.
Today’s lesson on GST attempts to simplify this concept for you.
The following Presentation enumerates the various provisions w.r.t. ITC, how it can be used,eligibilty and conditions for claiming ITC along with various case studies and illustrations. further, it elaborates the concept of input service distributor.
It provides the understanding into the meaning of input, input services and capital goods for availing credits under India GST, with related conditions, restrictions and time limits
One of the fundamental features of GST is the seamless flow of input credit across the chain and across the country for supply of Goods or Services. Know more about ITC under GST at https://cleartax.in/s/gst-input-tax-credit/
Short Term Course on GST- Input Tax CreditSandeep Gupta
This module deals with Input Tax Credit, an important element of GST. This module states the eligibility to avail ITC and events when ITC can not be availed.
In this you will find a detailed introduction about GST and its conceptual aspects.
1. What is GST.
2. benefit of GST.
3. Importance for different class of people.
4. Registration requiremnets.
5. Supply
6. Place of supply.
7. Value of supply.
8. Time of supply.
9. Returns
In this you will find a detailed introduction about GST and its conceptual aspects.
1. What is GST.
2. benefit of GST.
3. Importance for different class of people.
4. Registration requiremnets.
5. Supply
6. Place of supply.
7. Value of supply.
8. Time of supply.
9. Returns
Responsibilities of the office bearers while registering multi-state cooperat...Finlaw Consultancy Pvt Ltd
Introduction-
The process of register multi-state cooperative society in India is governed by the Multi-State Co-operative Societies Act, 2002. This process requires the office bearers to undertake several crucial responsibilities to ensure compliance with legal and regulatory frameworks. The key office bearers typically include the President, Secretary, and Treasurer, along with other elected members of the managing committee. Their responsibilities encompass administrative, legal, and financial duties essential for the successful registration and operation of the society.
WINDING UP of COMPANY, Modes of DissolutionKHURRAMWALI
Winding up, also known as liquidation, refers to the legal and financial process of dissolving a company. It involves ceasing operations, selling assets, settling debts, and ultimately removing the company from the official business registry.
Here's a breakdown of the key aspects of winding up:
Reasons for Winding Up:
Insolvency: This is the most common reason, where the company cannot pay its debts. Creditors may initiate a compulsory winding up to recover their dues.
Voluntary Closure: The owners may decide to close the company due to reasons like reaching business goals, facing losses, or merging with another company.
Deadlock: If shareholders or directors cannot agree on how to run the company, a court may order a winding up.
Types of Winding Up:
Voluntary Winding Up: This is initiated by the company's shareholders through a resolution passed by a majority vote. There are two main types:
Members' Voluntary Winding Up: The company is solvent (has enough assets to pay off its debts) and shareholders will receive any remaining assets after debts are settled.
Creditors' Voluntary Winding Up: The company is insolvent and creditors will be prioritized in receiving payment from the sale of assets.
Compulsory Winding Up: This is initiated by a court order, typically at the request of creditors, government agencies, or even by the company itself if it's insolvent.
Process of Winding Up:
Appointment of Liquidator: A qualified professional is appointed to oversee the winding-up process. They are responsible for selling assets, paying off debts, and distributing any remaining funds.
Cease Trading: The company stops its regular business operations.
Notification of Creditors: Creditors are informed about the winding up and invited to submit their claims.
Sale of Assets: The company's assets are sold to generate cash to pay off creditors.
Payment of Debts: Creditors are paid according to a set order of priority, with secured creditors receiving payment before unsecured creditors.
Distribution to Shareholders: If there are any remaining funds after all debts are settled, they are distributed to shareholders according to their ownership stake.
Dissolution: Once all claims are settled and distributions made, the company is officially dissolved and removed from the business register.
Impact of Winding Up:
Employees: Employees will likely lose their jobs during the winding-up process.
Creditors: Creditors may not recover their debts in full, especially if the company is insolvent.
Shareholders: Shareholders may not receive any payout if the company's debts exceed its assets.
Winding up is a complex legal and financial process that can have significant consequences for all parties involved. It's important to seek professional legal and financial advice when considering winding up a company.
A "File Trademark" is a legal term referring to the registration of a unique symbol, logo, or name used to identify and distinguish products or services. This process provides legal protection, granting exclusive rights to the trademark owner, and helps prevent unauthorized use by competitors.
Visit Now: https://www.tumblr.com/trademark-quick/751620857551634432/ensure-legal-protection-file-your-trademark-with?source=share
Military Commissions details LtCol Thomas Jasper as Detailed Defense CounselThomas (Tom) Jasper
Military Commissions Trial Judiciary, Guantanamo Bay, Cuba. Notice of the Chief Defense Counsel's detailing of LtCol Thomas F. Jasper, Jr. USMC, as Detailed Defense Counsel for Abd Al Hadi Al-Iraqi on 6 August 2014 in the case of United States v. Hadi al Iraqi (10026)
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These slides helps the student of international law to understand what is the nature of international law? and how international law was originated and developed?.
The slides was well structured along with the highlighted points for better understanding .
In 2020, the Ministry of Home Affairs established a committee led by Prof. (Dr.) Ranbir Singh, former Vice Chancellor of National Law University (NLU), Delhi. This committee was tasked with reviewing the three codes of criminal law. The primary objective of the committee was to propose comprehensive reforms to the country’s criminal laws in a manner that is both principled and effective.
The committee’s focus was on ensuring the safety and security of individuals, communities, and the nation as a whole. Throughout its deliberations, the committee aimed to uphold constitutional values such as justice, dignity, and the intrinsic value of each individual. Their goal was to recommend amendments to the criminal laws that align with these values and priorities.
Subsequently, in February, the committee successfully submitted its recommendations regarding amendments to the criminal law. These recommendations are intended to serve as a foundation for enhancing the current legal framework, promoting safety and security, and upholding the constitutional principles of justice, dignity, and the inherent worth of every individual.
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Get insights into DNA testing and its application in civil and criminal matters. Find out how it contributes to fair and accurate legal proceedings. For more information: https://www.patronslegal.com/criminal-litigation.html
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DECODING GST- INPUT TAX CREDIT OF CGST, SGST AND IGST
1. DECODING GST- INPUT TAX CREDIT OF
CGST, SGST AND IGST
CA Ashish Garg
B. Com (H). FCA, LL.B.
Goods and Service Tax has brought the ray of hope of increased revenue for Government and
elimination of cascading effect of multiple taxes and simple tax structure for Assessees. GST has
now become a reality and it will finally be implemented with effect from July 1, 2017. With only
less than 6 months left, it is important for all the stakeholders to be familiar with GST
provisions. In this article, author has tried to articulate the basic concepts of Input Tax credit.
In every value added taxation structure, Input tax credit remains the backbone of such tax
structures as it removes the cascading effect of taxes. In GST also being a value added tax, it is
the intention of the lawmakers to allow seamless flow of credit in the supply chain and remove
cascading effect of taxes.
Before, moving forward with the discussion on input tax credit, it is of paramount importance
to understand the meaning of certain terms relevant for understanding the concept.
Capital Goods: All goods which are capitalized in the books of accounts of the person claiming
the input tax credit and which are used or intended to be used for the purpose of business or
commerce shall be considered as Capital Goods.
It is a major change as compared to present scenario where the definition of capital goods is
very specific and covers limited goods under its purview.
Inputs: All movable goods other than money and securities including actionable claim, growing
crops, grass and things attached to or forming part of the land which are agreed to be severed
before supply or under a contract of supply but excluding capital goods which are used or
intended to be used for the purpose of business or commerce.
Input Service: Anything which is not a good and is used or intended to be used for the purpose
of business or commerce shall be considered as Input Service.
Exempted Supply: Supply of any good or service which is not taxable under this act or
exempted from payment of tax, including goods/services taxable at nil rate of tax
Taxable Supply: Supply of any good or service which is taxable under this act
2. DECODING GST- INPUT TAX CREDIT OF CGST, SGST AND IGST
Page | 2
WHAT IS INPUT TAX CREDIT
Chapter V of the revised MGL deals with the provisions regarding availment, utilization and
distribution of credit. Section 2(56) of MGL defines input tax credit as credit of IGST, CGST and
SGST charged on any supply of goods or service including import of goods and tax paid under
reverse charge mechanism to a taxable person which is used or intended to be used for the
purpose of business or commerce.
ELIGIBILITY AND CONDITIONS FOR AVAILMENT OF INPUT TAX CREDIT
Section 16 of MGL covers the provision with respect to the eligibility of an assessee to avail
Input Credit and conditions of such availment.
Eligibility and Conditions for availment:
He should be a registered taxable person;
He must be in possession of proper duty paying document viz., tax invoice, debit note
issued by the supplier of goods or any other document as may be prescribed;
He should have received the goods or services supplied under aforesaid document;
The supplier of goods has actually paid the tax charged on the supplies made by him
either in cash or through input tax credit;
He has furnished the returns as prescribed under Section 34;
He has paid the amount towards value of goods or services along with tax payable on
such goods or service to the supplier of goods within 3 months from the date of issue of
invoice by the supplier;
No input tax credit shall be available on supply of goods or services pertaining to a
financial year after filing of return for the month of September following the end of such
financial year or annual return whichever is earlier. Hence, an assessee can rectify any
mistake and take input tax credit only upto the month of September following the end
of financial year or annual return whichever is earlier after which the same will lapse.
He has not claimed Depreciation on the tax component of capital goods under Income
Tax Act.
Input Tax credit on capital goods shall be available in the year of its receipt, however in
case of pipelines and telecommunication tower fixed to earth by foundation or
structural support including foundation and structural support thereto, the input tax
credit shall be available as under:
a) maximum 1/3rd of total input tax in the financial year in which the aforesaid goods are
received;
3. DECODING GST- INPUT TAX CREDIT OF CGST, SGST AND IGST
Page | 3
b) maximum 2/3rd of total input tax in the immediately succeeding financial year; and
c) Balance input tax credit in any subsequent financial year.
It is interesting to note that in comparison to present indirect tax structure where cenvat credit
of duty paid on capital goods is available in installments, the revised MGL has allowed the entire
input tax credit on capital goods in the year of receipt of goods thereby reducing the working
capital needs of the assessee.
APPORTIONMENT OF CREDIT
MGL provides for more simplified procedure for availment of input tax credit on capital goods,
inputs and input services used for supply of exempted goods/services and taxable
goods/services.
Every assessee shall be entitle to avail full input tax credit of tax paid on capital goods, inputs
and input services which are exclusively used for supply of taxable goods/services, whereas in
following cases, proportionate input tax credit shall be available to the assessee:
- Goods or services are used partly for business and partly for other purposes;
- Goods or services are used partly for supply of taxable goods/services and partly for
exempted goods/services.
Presently, CENVAT Credit Rules permits full CENVAT Credit on capital goods if such goods are
used for supply of exempted goods/services and taxable goods/services, whereas in the MGL,
assessees shall be under an obligation to reverse proportionate input tax credit on capital goods
also.
In the revised MGL, Lawmakers have allowed Banks and financial institutions including non
banking financial company to take input tax credit of capital goods, inputs and input services
equivalent to 50% of the eligible input tax credit.
BLOCKED CREDIT
MGL has restricted the availment of input tax credit on following goods/services, which shall
not be available to the assessee even if he receives such goods/services in the course of their
business:
a) Tax charged on Motor Vehicle and other conveyances except when they are used for
i) further supply of such motor vehicles or conveyance (car dealers etc.);
ii) transportation of passengers (cab, buses etc.); and
4. DECODING GST- INPUT TAX CREDIT OF CGST, SGST AND IGST
Page | 4
iii) imparting training on driving, flying or navigating such motor vehicle or conveyances
(motor driving training school, etc.)
iv) for transportation of goods (trucks etc.)
b) supply of goods and services namely
(i) food and beverages, outdoor catering, beauty treatment, health services, cosmetic
and plastic surgery except where such inward supply of goods or services of a particular
category is used by a registered taxable person for making an outward taxable supply of
the same category of goods or services;
ii) membership of a club, health and fitness centre;
iii) rent-a-cab, life insurance, health insurance except where the Government notifies
the services which are obligatory for an employer to provide to its employees under any
law for the time being in force; and (Input tax credit of taxes paid on insurance and
repair of motor vehicle shall be available under MGL which is presently prohibited under
current indirect tax statutes);
(iv) travel benefits extended to employees on vacation such as leave or home travel
concession.
(c) works contract services when supplied for construction of immovable property, other than
plant and machinery, except where it is an input service for further supply of works contract
service; (works contractor can only avail input credit of works contract services and input tax
credit shall be available only if such services are used for provision of works contract and not for
personal use);
(d) goods or services received by a taxable person for construction of an immovable property
on his own account, other than plant and machinery, even when used in course or furtherance
of business; (i.e. Input tax credit shall be available to builders/developers on goods or services
used for construction/development of residential or commercial complex)
(e) goods and/or services on which tax has been paid under section 9 (i.e. Composition
Scheme);
(f) goods and/or services used for personal consumption;
(g) goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples; and
(h) any tax paid in terms of sections 67, 89 or 90 (i.e. in cases where there is a fraud, collusion,
search and seizure).
UTILIZATION OF INPUT TAX CREDIT
Every assessee shall be entitle to utilize the eligible input tax credit of tax paid on supply of
capital goods, inputs and input services and as available in its electronic credit ledger in its
return on self assessment basis.
5. DECODING GST- INPUT TAX CREDIT OF CGST, SGST AND IGST
Page | 5
All the assessee shall be required to file return of inward supply and outward supply with the
GST department and details of every such return shall be matched with the corresponding
details of the corresponding taxable person.
If the input tax credit taken by the recipient of goods or services is in excess of tax declared by
the supplier, then such taxable person shall be liable to reverse the input tax credit and pay the
amount of so claimed in its return. However, such taxable person shall be entitle to claim back
the input tax credit after the rectification of records by selling dealer.
MANNER OF UTILIZATION OF CREDIT OF CGST, SGST AND IGST
The amount of inputtax creditof IGST available inthe electronic credit ledger shall first be utilized
towardspaymentof IGST and the amountremaining,if any,maybe utilizedtowardsthe paymentof
CGST and SGST, in that order.
The amount of inputtax creditof CGST available inthe electroniccreditledger shall first be utilized
towardspaymentof CGST and the amount remaining, if any, may be utilized towards the payment
of IGST.
The amount of inputtax creditof SGST available inthe electroniccredit ledger shall first be utilized
towardspaymentof SGST and the amount remaining, if any, may be utilized towards the payment
of IGST.
Cross Utilization of input tax credit of CGST and SGST has been prohibited in the model GST law. It is
unlikely that restriction on cross utilization of input tax credit of CGST and SGST will have any adverse
impact on the assessee as they can adjust input tax credit of CGST and SGST with IGST and vice versa.
Input tax credit provisions in special circumstances
In following cases, an assessee shall be eligible to avail the input tax credit:
Where a person who becomes liable to take registration under GST shall be eligible to
avail input credit of inputs lying in stock and inputs contained in semi finished or
finished goods held in stock on the date immediately preceding the day he becomes
liable to pay tax under GST. However, the availment of input tax credit is subject to the
provision that he shall apply for registration within 30 days from the date on which he
becomes liable to take registration.
Any person who voluntarily takes registration under GST shall be entitle to avail input
tax credit of inputs lying in stock and inputs contained in semi finished or finished goods
held in stock on the date immediately preceding the date of grant of registration.
6. DECODING GST- INPUT TAX CREDIT OF CGST, SGST AND IGST
Page | 6
Any person who has ceases to pay GST under Composition levy, shall be eligible to avail
input credit of inputs lying in stock and inputs contained in semi finished or finished
goods held in stock and on capital goods on the date immediately preceding the day he
becomes liable to pay tax under normal scheme of GST.
Any person who is engaged in supply of exempted goods or services and supply of such
good or service has become taxable, then it shall be eligible to avail input credit of
inputs lying in stock and inputs contained in semi finished or finished goods held in stock
and on capital goods on the date immediately preceding the day such supply becomes
taxable.
In all the aforesaid cases, an assessee shall be entitle to avail input tax credit within one year
from the date of issuance of tax invoice in respect of inputs lying in stock and inputs contained
in semi finished or finished goods held in stock and on capital goods.
Reversal of Input tax credit in certain circumstances
Where any assessee is engaged in supply of taxable goods or service and he switches to
pay GST under composition levy or where the goods/services supplied by him becomes
absolutely exempt, in such cases, he shall be liable to pay amount equivalent to input
tax credit pertaining to inputs lying in stock and inputs contained in semi finished or
finished goods held in stock and on capital goods on the date immediately preceding the
date of such switch or from the date of grant of exemption.
Where a registered taxable person has availed the Input Tax Credit on capital goods or
plant and machinery and he has sold such capital goods or plant and machinery, then it
shall be liable to pay input tax credit reduced by such percentage as may be prescribed
or tax on transaction value of sale of such capital goods or plant and machinery
whichever is higher.
CONCLUSION
In this article, the paper writer has tried to summarize the basic concepts of Input Tax Credit
under proposed Goods and Service Tax Law. There are various other issues related to input tax
credit viz., job worker, ISD which could not be discussed in this article.
For any clarification or discussion on this article, the author may be contacted at A2B/16A, Ekta
Apartments, Paschim Vihar, Delhi-110063, Phone: 011-45564490, 011-43464490, E-mail:
mail@arajassociates.com.
Disclaimer: The views in this article are author's point of view. This article is not intended to
substitute the legal advice. No portion of this article may be copied, retransmitted, reposted,
duplicated or otherwise used, without the express written approval of the author.
The Copyright of the article is with the author.