GST is nothing but a value added tax on goods & services combined. It is the provisions of Input Tax Credit that make GST a value added tax i.e collection of tax at all points after allowing credit for the inputs

1. Covered In Chapter V of Revised Model GST Law
Dated 25-11-2016 .
Came into force on the date as may be notified.

2. A. Overview- GST & ITC
B. Eligibility & Conditions to take Credit
C. Ineligible/ Blocked Input tax Credit
D. Proportionate credit of Input Tax
E. Input Credit in Special Circumstances
F. Recovery of ITC wrongly taken
G. Utilization of ITC for Payment

3. oGST is a Value Added Tax.
oApplies on supplies of Goods / Services made for consideration.
Scheme of Taxation under GST
•CGST- levied & collected by Centre on intra state supplies
•SGST- levied & collected by States on Intra state supplies
•IGST- levied & collected by the Centre on Inter state supplies

4. •On Account of the provisions of ITC, GST is a Value Added
Tax as Govt. will collect tax on each stage of supply after
allowing the Credits for the Inputs.
•Input tax means tax charged on any supply of Goods or
Services
•It includes tax paid under Reverse Charge
•It does not include tax charged under Composition Scheme.

5. •Every registered taxable person is eligible to take credit of input
tax.
•Charged on any supply of goods/ services to him
•Which is used or intended to be used in the course or furtherance
of his business
•The amount so charged shall be credited to electronic credit
ledger of such person.

6. •Registered taxable person is entitled to get ITC if-
Having possession of taxpaying docs such as invoice &
debit note & others.
Has received or deemed to received the goods and/or
services.
Tax charged for such supply has been actually paid.
Has furnished return as per sec.34.
•If goods received in lots/installments- receipt of last
installment.

7. No ITC is allowed in respect of following:
•Motor vehicles except when used for making taxable supplies:
Further supply of such vehicles
Transportation of goods/passengers
Imparting training or motor driving skills
•Supply of goods/ services, namely:
Food & beverages, outdoor catering, beauty treatment,
health services, cosmetic and plastic surgery except for supply
of the same category of goods/services
Membership of a club & fitness centre
Rent a cab, life insurance & health insurance
Travel benefits extended to employee on vacation such as
leave or home travel concession

8. •Work contract services for construction of immovable property
other than P&M (ITC allowed if further supply of WC Service).
•Goods & services received for Construction of IP other than P&M.
•Supplies on which tax has been paid under Composition Scheme.
•Supplies used for personal consumption
•Goods lost, stolen, destroyed, written off or disposed of by way
of gift or free samples.
•Any tax paid in relation to or after issuance of SCN

9. •No ITC is allowable on the tax component of capital goods
on which dep. has been claimed under Income tax.
•No ITC is allowed for any invoice/ debit note after
furnishing return u/s 34 for September of next F/Y or
furnishing of annual return, whichever is earlier.
•In case of service, if payment is not made to supplier within
3 months, then credit availed by the recipient shall be added
to his output tax liability.

10. 2.Input Partly for
Non-Business
1. . Credit of Input Tax in respect Pipelines
& Telecommunication Tower
4.Optional Scheme
for Banking
Co./F.I./NBFC
3.Input Partly for
Exempt supply
1. Credit of Pipelines
&
Telecommunication
Tower
• Fixed to earth by foundation or structural
support
 1st year- 1/3rd of total input credit in the
year of receipt of goods
 2nd year- 2/3rd of total input credit
including input avail on 1st year
 The balance of the amount of credit in
any subsequent F/Y.
• The credit also includes input tax on
Foundation & Structural Support

11. 2.Input Partly for
Non-Business
2.Input used Partly for Business & Partly
for Non-Business
4.Optional Scheme
for Banking
Co./F.I./NBFC
3.Input Partly for
Exempt supply
1. Credit of Pipelines
&
Telecommunication
Tower
• Goods and/or Services used for Business
purpose- Credit Claimable
• Goods and/or Services used for Non-
Business Purposes- Credit Non-Claimable

12. 2.Input Partly for
Non-Business
2.Input used Partly for Taxable Supplies &
Partly for Exempted Supplies
4.Optional Scheme
for Banking
Co./F.I./NBFC
3.Input Partly for
Exempt supply
1. Credit of Pipelines
&
Telecommunication
Tower
• Goods and/or Services used for effective
taxable supplies (Including Zero Rated
Supplies) - Credit Claimable
• Goods and/or Services used for Exempted
Supplies ( Including inputs/services used for
supplies covered under reversed charge) -
Credit Non-Claimable

13. 2.Input Partly for
Non-Business
4.Optional Scheme for Banking Company
or Financial Institution or NBFC engaged in
accepting loans or advances
4.Optional Scheme
for Banking
Co./F.I./NBFC
3.Input Partly for
Exempt supply
1. Credit of Pipelines
&
Telecommunication
Tower
• 1st option - claim 50% of eligible input tax
or
2nd option- Claim credit of Eligible input on
Goods and/or Services used for effective
taxable supplies (Including Zero Rated
Supplies) but excluding exempted supplies
& RCM Supplies.
• Option not to be withdrawn during the
financial year.

14. 1. Credit of input
held in stock and
inputs contained
in semi finished
goods and
Finished Goods if:
2. Transfer of Input Tax
3. Reversal of Input Tax
4. ITC in case of Job
Worker
1.Credit of input held in stock and inputs
contained in semi finished/Finished goods
A. Registration Granted
within 30 Days
B. Opted Voluntary
registration
C. Cease for
Composition Scheme
D. Exempt supply
becomes Taxable
Supply
• If person applied for registration within 30
Days from the date of liability to register &
granted such registration.
• He is entitled to take credit of input held in
stock and inputs contained in semi
finished/Finished goods
• From the day immediately preceding the
date from which he becomes liable to pay
tax.
• If not applied within 30 days- no ITC.

15. 1. Credit of input
held in stock and
inputs contained
in semi finished
goods and
Finished Goods if:
2. Transfer of Input Tax
3. Reversal of Input Tax
4. ITC in case of Job
Worker
1.Credit of input held in stock and inputs
contained in semi finished/Finished goods
A. Registration Granted
within 30 Days
B. Opted Voluntary
registration
C. Cease for
Composition Scheme
D. Exempt supply
becomes Taxable
Supply
• Person who obtains voluntary registration
• He is entitled to take credit of input held in
stock and inputs contained in semi
finished/Finished goods
• From the day immediately preceding the
date of grant of registration.

16. 1. Credit of input
held in stock and
inputs contained
in semi finished
goods and
Finished Goods if:
2. Transfer of Input Tax
3. Reversal of Input Tax
4. ITC in case of Job
Worker
1.Credit of input held in stock and inputs
contained in semi finished/Finished goods
A. Registration Granted
within 30 Days
B. Opted Voluntary
registration
C. Cease for
Composition Scheme
D. Exempt supply
becomes Taxable
Supply
• If person ceases to pay tax under
composition scheme
• He is entitled to take credit of input held in
stock and inputs contained in:
 semi finished/Finished goods
 on capital goods
• From the day immediately preceding the
date from which he becomes liable to pay
tax under regular scheme.

17. 1. Credit of input
held in stock and
inputs contained
in semi finished
goods and
Finished Goods if:
2. Transfer of Input Tax
3. Reversal of Input Tax
4. ITC in case of Job
Worker
1.Credit of input held in stock and inputs
contained in semi finished/Finished goods
A. Registration Granted
within 30 Days
B. Opted Voluntary
registration
C. Cease for
Composition Scheme
D. Exempt supply
becomes Taxable
Supply
• Exempt supply of goods or services by a person
becomes a taxable supply
• He is entitled to take credit of input held in
stock and inputs contained in:
 Semi finished/Finished goods relatable to
such exempt supply
 Capital goods exclusively used for such
exempt supply
• From the day immediately preceding the date
from which such supply becomes taxable.

18. 1. Credit of input
held in stock and
inputs contained
in semi finished
goods and
Finished Goods if:
2. Transfer of Input Tax
3. Reversal of Input Tax
4. ITC in case of Job
Worker
2.Transfer of unutilized Input Tax
A. Registration Granted
within 30 Days
B. Opted Voluntary
registration
C. Cease for
Composition Scheme
D. Exempt supply
becomes Taxable
Supply
• Change in the constitution of a taxable
person
• Due to sale, merger, demerger,
amalgamation, lease or transfer of
business.
• Such person is allowed to transfer Input tax
unutilized in the books of accounts

19. 1. Credit of input
held in stock and
inputs contained
in semi finished
goods and
Finished Goods if:
2. Transfer of Input Tax
3. Reversal of Input Tax
4. ITC in case of Job
Worker
A. Registration Granted
within 30 Days
B. Opted Voluntary
registration
C. Cease for
Composition Scheme
D. Exempt supply
becomes Taxable
Supply
3.Reversal of credit on Switching over
• Credit to be reversed on inputs held in
stock, inputs contained in semi-finished
/finished goods
• on switching over to composition scheme/
on goods becoming absolutely exempt.
• On the day immediately preceding the date
of such switch over
• Balance credit to be lapsed.

20. 1. Credit of input
held in stock and
inputs contained
in semi finished
goods and
Finished Goods if:
2. Transfer of Input Tax
3. Reversal of Input Tax
4. ITC in case of Job
Worker
4.ITC in respect of inputs send for Job Work
A. Registration Granted
within 30 Days
B. Opted Voluntary
registration
C. Cease for
Composition Scheme
D. Exempt supply
becomes Taxable
Supply
• The Principal can avail ITC on inputs & capital
goods sent to job worker (as may be
prescribed).
• Such transfer shall be deemed as sale to job
worker if not returned back to principal/supplied
directly to customer within a period of:
 1 year in case of Inputs
 3 years in case of capital goods
• From :
 The date of sending from business place of
principal
 The date of receipt in case directly sent to
Job worker

21. oWhen the credit has been taken wrongly
oThe same shall be recovered from the registered
taxable person
oIn accordance with the provisions of the Act

22. I T C
CGST I GSTSGST
CGS
T
IGST SGST IGST IGST
CGS
T
SGST

23. Thank you