Input Tax Credit Mechanism in GST - GST Law and Procedure [January, 2019] - GST

..... he same tax regime, credit of tax paid at every stage would be available as set-off for payment of tax at every subsequent stage. Let us understand how ‘cascading’ of taxes takes place in the present regime. Central excise duty charged on inputs used for manufacture of final product can be availed as credit for payment of Central Excise Duty on the final product. For example, to manufacture a pen, the manufacturer requires, plastic granules, refill tube, metal clip, etc. All these ‘inputs’ are chargeable to central excise duty. Once a ‘pen’ is manufactured by using these inputs, the pen is also chargeable to central excise duty. Let us assume that the cost of all the above mentioned inputs is say, ₹ .....

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Input Tax Credit Mechanism in GST - GST Law and Procedure January, 2019 - GST

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..... re going to be clubbed together or subsumed in the GST regime are as under: Central Taxes State Taxes Central Excise duty Additional duties of excise Excise duty levied under Medicinal & Toilets Preparation Act Additional duties of customs (CVD & SAD) Service Tax Surcharges & Cesses State VAT / Sales Tax Central Sales Tax Purchase Tax Entertainment Tax (other than those levied by local bodies) Luxury Tax Entry Tax (All forms) Taxes on lottery, betting & gambling Surcharges & Cesses GST comprises of the following levies: a) Central Goods and Services Tax (CGST)[also known as Central Tax] on intra-state or intra-union territory without legislature supply of goods or services or both. b) State Goods and Services Tax (SGST) .....

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Input Tax Credit Mechanism in GST - GST Law and Procedure January, 2019 - GST

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..... vail the credit only when the last lot of the inputs is received. f) He should pay the supplier the value of the goods or services along with the tax within 180 days from the date of issue of invoice, failing which the amount of credit availed by the recipient would be added to his output tax liability, with interest [rule 2(1) & (2) of ITC Rules]. However, once the amount is paid, the recipient will be entitled to avail the credit again. In case part payment has been made, proportionate credit would be allowed. a) Documents on the basis of which credit can be availed are: a) Invoice issued by a supplier of goods or services or both b) Invoice issued by recipient alongwith proof of payment of tax c) A debit note issued by supplier d) Bi .....

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Input Tax Credit Mechanism in GST - GST Law and Procedure January, 2019 - GST

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..... ction of immovable property on his own account, other than plant & machinery, even when used in course or furtherance of business; c) goods and/or services on which tax has been paid under composition scheme; d) goods and/or services used for private or personal consumption, to the extent they are so consumed; e) Goods lost, stolen, destroyed, written off, gifted, or free samples; f) Any tax paid due to short payment on account of fraud, suppression, mis-declaration, seizure, detention. a) Special circumstances under which ITC is available: a) A person who has applied for registration within 30 days of becoming liable for registration is entitled to ITC of input tax in respect of goods held in stock (inputs as such and inputs contained .....

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Input Tax Credit Mechanism in GST - GST Law and Procedure January, 2019 - GST

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