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AN OVERVIEW-INPUT TAX CREDIT UNDER GST

Income Tax - By: - sandeep rawat - Dated:- 3-8-2018 - 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) [also known as State Tax] on intra-state supply of goods or services or both. c. Union Territory Goods and Services Tax (UTGST) [also known as Union territory Tax] on intra-union territory supply of goo .....

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GST IGST CGST IGST SGST/UTGST IGST IGST CGST, then SGST/UTGST Credit of CGST cannot be used for payment of SGST/UTGST and credit of SGST/UTGST cannot be utilised for payment of CGST. Some of the technical aspects of the scheme of Input Tax Credit are as under: A. Any registered person can avail credit of tax paid on the inward supply of goods or services or both, which is used or intended to be used in the course or furtherance of business. B. The pre-requisites for availing credit by registered .....

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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. C. 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 pr .....

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er of the following FY to which invoice pertains or date of filing of annual return, whichever is earlier E. The Input Service Distributor (ISD) may distribute the credit available for distribution in the same month in which, it is availed. The credit of CGST, SGST, UTGST and IGST shall be distributed as per the provisions of Rule 4(1) (d) of ITC Rules. ISD shall issue invoice in accordance with the provisions made under Rule 9(1) of Invoice Rules. F. ITC is not available in some cases as mentio .....

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law; 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 & machinery, except where it is an input service for further supply of works contract; d. Goods or services received by a taxable person for construction of immovable property on his own account, other than plant & machinery, even when used in course or furtherance of business; e. Goods and/or .....

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entitled to ITC of input tax in respect of goods held in stock(inputs as such and inputs contained in semi-finished or finished goods) on the day immediately preceding the date from which he becomes liable to pay tax. b. A person who has taken voluntary registration under section 23(3) of the CGST Act, 2017 is entitled to ITC of input tax in respect of goods held in stock (inputs as such and inputs contained in semi - finished or finished goods) on the day, immediately preceding the date of regi .....

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n stock (inputs as such and inputs contained in semi-finished or finished goods) relatable to exempt supplies. He shall also be entitled to take credit on capital goods used exclusively for such exempt supply, subject to reductions for the earlier usage as prescribed in the rules. e. ITC, in all the above cases, is to be availed within 1 year from the date of issue of invoice by the supplier. f. In case of change of constitution of a registered person on account of sale, merger, demerger etc, th .....

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duction as prescribed in rules (5% for every quarter or part thereof) shall have to be paid. In case the tax on transaction value of the supply is more, the same would have to be paid. ITC ON Different cases: ITC for Capital Goods ITC is available for capital goods under GST. But, ITC is not available for- i. Capital Goods used exclusively for making exempted goods ii. Capital Goods used exclusively for non-business (personal) purposes Note: No ITC will be allowed if depreciation has been claime .....

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Directly from the place of supply of the supplier of such goods However, to enjoy ITC, the goods sent must be received back by the principal within 1 year (3 years for capital goods). ITC Provided by Input Service Distributor (ISD) An input service distributor (ISD) can be the head office (mostly) or a branch office or registered office of the registered person under GST. ISD collects the input tax credit on all the purchases made and distribute it to all the recipients (branches) under differe .....

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