Inverted Tax Utilization, Goods and Services Tax - GST

[DEEPAK SHARMA]

Sir,

One is manufacturing normal products, where rate of tax on inputs and output is almost same, simultanously they manufacturing footwear where input tax rate is higher i.e. 18% and output tax rate is 6% it means its under inverted tax rate structure.

Is it possible to the taxpayer they can use spare tax accumulated on raw material of footwear to liability arised on normal products.

Thanks

Posts / Replies

[KASTURI SETHI]

Yes. There is no restriction on utilisation in the situation explained. Even now refund is admissible but too many strings are attached.

[Ganeshan Kalyani]

law says if purchases / expense incurred in course or furtherance of business then input tax credit is eligible. both the products are taxable so credit cannot be denied. though it seems that excess credit of normal product can be used to set off liability of footwear, but chances are there for the litigation. this is because the business vertical is different. though the gstin is same.

[koushal sharma]

If both the businesses are covered under same GSTIN and all inputs are for business purpose, then you can use the same for tax liability of other goods.

To know more detailed faqs under GST, Just visit at GST Forum India and know more about

[KASTURI SETHI]

Sh.Sharma Ji,

Thanks for throwing more light.

[Ganeshan Kalyani]

going by the definition the credit can be taken if gstin is single .