SlideShare uma empresa Scribd logo
1 de 16
Baixar para ler offline
Guide to
INPUT TAX CREDIT
under GST
Introduction
2
Input Tax credit under GST
One of the most important pillars of an effective GST is the availability of Input Tax Credit (ITC) to remove the cascading effect of taxes on
transactions. In the enactment these important provisions have been mentioned in Sec 16 to 18 of the CGST Act and the respective State
Acts.
Input Tax Credit (ITC) is the backbone of the GST regime. GST is nothing but a value added tax on goods & services combined. It is these
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. The
procedures and restrictions laid down in these provisions are important to make sure that there is seamless flow of credit in the whole
scheme of transition without any misuse. Thus, the clarity of rules of availment and utilization will have significant impact on making GST a
taxpayer-friendly tax.
Therefore to act as a ready reckoner we have devised this presentation wherein we would be guiding you about the available ITC
A. General rule with regard to availability of credit
B. Conditions for availment of ITC
C. Credits barred by the law from being availed
D. Analysis of the Input Tax Rules and Reversal of ITC
GENERAL RULE
3
GENERAL CONDITIONS
4
Sec 16 of the CGST and SGST Act
Every registered person can subject to certain limitations and conditions can avail ITC of the goods and services
which have been received during the year. Certain pertinent points with regard to the general availability are as follows
:-
A. The intention of utilize the goods or services for providing output services is of utmost importance. It is not
necessary that all the goods and services which have been procured have to be utilized. Even if goods have been
procured and kept in stock then also the credit of the tax paid on such goods shall be available to us.
B. The credit shall only be available if the goods or services so procured are to be used “in the course OR
furtherance of his business”. Thus if any goods or services have been used which are not in the course of or for
the expansion of the business shall not be available. Therefore there needs to be at least an indirect nexus
between the procurement and utilization.
C. Such Input credit is available in the electronic ledger of the assessee.
GENERAL CONDITIONS
5
• IGST
• CGST
• SGST
IGST
• CGST
• IGST
CGST
• SGST
• IGST
SGST
NOTES
A. In terms of the act the credit of IGST can be used against tax liability of all acts. However, the set
off hierarchy would be as mentioned above.
B. Credit available in the ledger of CGST cannot be set off against tax liability under SGST and vice
versa. However both can be set off against IGST.
CONDITIONS for ELIGIBILITY
6
CONDITIONS for ELIGIBILITY
 You are in possession of a tax invoice or debit note; AND
 The goods or services have been actually received; AND
 The tax on such goods and services has been actually paid to the government by
the supplier of goods or services; AND
 You have filed your return; AND
 Such Inputs have not been used for exempt supply (excluding export); AND
 In case of receipt of goods or services in tranches, the last tranche has been
actually received
7
Restricted ITC
8
RESTRICTED CREDITS
Any ITC available on purchase of Motor
Vehicle or availing Rent-a-cab services
Caveat – If any vehicles are bought for goods
transportation then that would be available.
9
RESTRICTED CREDITS
1. Foods and Beverages
2. Outdoor Catering
3. Beauty Treatment
4. Health Services
5. Cosmetic
10
6. Membership of a Club
7. Life and Health Insurance
8. Travel benefits extended to
employees on vacation
NOTES
A. Items 1-5 credit shall be available to those who are providing similar output services.
B. Item 7 – Credit shall be available if mandated by Government as mandatory OR while
providing output taxable services
RESTRICTED CREDITS
11
NOTES
A. In case any goods or services are used in an immovable property and such expenses
are NOT capitalised then the credit of such goods and services shall be available.
 Works contract services for creation of an
immovable property unless the same is intended
to be sold.
 Goods and services used for construction of an
immovable property for self use such as office.
RESTRICTED CREDITS
12
NOTES
A. The act does not have any definition of the words “personal consumption”. It can be said to
include those expenses wherein the company is NOT the beneficiary of such goods or services.
 Purchase from a dealer covered under composition scheme
 Goods or services used for personal consumption
 Goods lost, stolen, destroyed, written or disposed off
Other IMPORTANT points
13
IMPORTANT Points
 The vendor should be paid towards the services within 180 days of date of invoice
else the credit is liable to be reversed. Proportionate credit would be available if part
of the money is retained in terms of performance obligations.
 Input shall be availed (not necessarily utilised) within 1 year from date of issue of
invoice or before the 20th October of the following financial year whichever is earlier.
 In case the assessee is providing some exempt services (not export sales) then
partial reversal of the Input tax credit would be required.
 In case of any discrepancy between returns filed by supplier and claim by us, we
would be allowed 2 months to rectify else it would be reversed.
14
GUIDELINES
 Ensure correct GSTIN of the company is used and the same is informed to all the
vendors of the company
 In case of employee reimbursements the employees should ensure they give the
GSTIN of the company before generation of the bills.
 Ensure company has a bill capturing mechanism so that credit on any bill is not
missed.
 The vendors charge correct GST (IGST or CG+SG) to avoid any issues later on.
 Since tax is to be paid by the recipient upon supply from unregistered dealer hence it
needs to be taken care that it is availed in the subsequent month
15
16
THANKS!
Any questions?
You can find us at
gst@sethspro.com | www.sethspro.com

Mais conteúdo relacionado

Mais procurados

Input tax credit (itc) under GST
Input tax credit (itc) under GSTInput tax credit (itc) under GST
Input tax credit (itc) under GSTArpit Verma
 
Overview of Registration on GST
Overview of Registration on GSTOverview of Registration on GST
Overview of Registration on GSTTeam Asija
 
Input Tax Credit under GST
Input Tax Credit under GSTInput Tax Credit under GST
Input Tax Credit under GSTGST Law India
 
Supply, Levy and Composition Levy under GST
Supply, Levy and Composition Levy under GSTSupply, Levy and Composition Levy under GST
Supply, Levy and Composition Levy under GSTGST Law India
 
Refund under GST updated
Refund under GST updatedRefund under GST updated
Refund under GST updatedgst-trichy
 
Gst input tax credit eligibility
Gst input tax credit    eligibilityGst input tax credit    eligibility
Gst input tax credit eligibilityCA Nemish Shah
 
Transitional Provision Under GST
Transitional Provision Under GSTTransitional Provision Under GST
Transitional Provision Under GSTMASOOM SEKHAR SAHOO
 
Input Tax Credit (ITC) in GST with Practical Examples
Input Tax Credit (ITC) in GST with Practical ExamplesInput Tax Credit (ITC) in GST with Practical Examples
Input Tax Credit (ITC) in GST with Practical ExamplesGSTIndia.biz
 
Assessment meaning and types in GST
Assessment meaning and types in GST Assessment meaning and types in GST
Assessment meaning and types in GST CA Mukesh Sharma
 
1. presentation on input tax credit under gst
1. presentation on input tax credit under gst1. presentation on input tax credit under gst
1. presentation on input tax credit under gstNarayan Lodha
 
E way bill under GST
E way bill under GSTE way bill under GST
E way bill under GSTmmdaga
 
GST-INPUT TAX CREDIT
GST-INPUT TAX CREDITGST-INPUT TAX CREDIT
GST-INPUT TAX CREDITSandhya -
 
Offences, penalties and prosecution under gst
Offences, penalties and prosecution under gst Offences, penalties and prosecution under gst
Offences, penalties and prosecution under gst DVSResearchFoundatio
 

Mais procurados (20)

Input tax credit (itc) under GST
Input tax credit (itc) under GSTInput tax credit (itc) under GST
Input tax credit (itc) under GST
 
Overview of Registration on GST
Overview of Registration on GSTOverview of Registration on GST
Overview of Registration on GST
 
Input Tax Credit under GST
Input Tax Credit under GSTInput Tax Credit under GST
Input Tax Credit under GST
 
Supply, Levy and Composition Levy under GST
Supply, Levy and Composition Levy under GSTSupply, Levy and Composition Levy under GST
Supply, Levy and Composition Levy under GST
 
Refund under GST updated
Refund under GST updatedRefund under GST updated
Refund under GST updated
 
Gst input tax credit eligibility
Gst input tax credit    eligibilityGst input tax credit    eligibility
Gst input tax credit eligibility
 
Transitional Provision Under GST
Transitional Provision Under GSTTransitional Provision Under GST
Transitional Provision Under GST
 
Rcm under gst
Rcm under gstRcm under gst
Rcm under gst
 
Input Tax Credit (ITC) in GST with Practical Examples
Input Tax Credit (ITC) in GST with Practical ExamplesInput Tax Credit (ITC) in GST with Practical Examples
Input Tax Credit (ITC) in GST with Practical Examples
 
Assessment meaning and types in GST
Assessment meaning and types in GST Assessment meaning and types in GST
Assessment meaning and types in GST
 
4. reverse charge machanism under gst.
4. reverse charge machanism under gst.4. reverse charge machanism under gst.
4. reverse charge machanism under gst.
 
1. presentation on input tax credit under gst
1. presentation on input tax credit under gst1. presentation on input tax credit under gst
1. presentation on input tax credit under gst
 
Job Work under GST
Job Work under GSTJob Work under GST
Job Work under GST
 
Invoice & Payment of Tax under GST
Invoice & Payment of Tax under GSTInvoice & Payment of Tax under GST
Invoice & Payment of Tax under GST
 
Registration under GST Law
Registration under GST LawRegistration under GST Law
Registration under GST Law
 
E way bill under GST
E way bill under GSTE way bill under GST
E way bill under GST
 
input tax credit under GST
input tax credit under GSTinput tax credit under GST
input tax credit under GST
 
GST-INPUT TAX CREDIT
GST-INPUT TAX CREDITGST-INPUT TAX CREDIT
GST-INPUT TAX CREDIT
 
GST Input Tax Credit
GST Input Tax CreditGST Input Tax Credit
GST Input Tax Credit
 
Offences, penalties and prosecution under gst
Offences, penalties and prosecution under gst Offences, penalties and prosecution under gst
Offences, penalties and prosecution under gst
 

Semelhante a GST - Input tax credit

Input Tax Credit - ITC
Input Tax Credit - ITCInput Tax Credit - ITC
Input Tax Credit - ITCChella Pandian
 
Overview about gst
Overview about gstOverview about gst
Overview about gstRajat Badaya
 
Overview about gst
Overview about gstOverview about gst
Overview about gstRajat Badaya
 
Gst impact on manufacturer 21.07.2017
Gst impact on  manufacturer 21.07.2017Gst impact on  manufacturer 21.07.2017
Gst impact on manufacturer 21.07.2017CA Dinesh Singhal
 
CA Vikas singh chauhan gst presentation VMR
CA Vikas singh chauhan gst presentation VMRCA Vikas singh chauhan gst presentation VMR
CA Vikas singh chauhan gst presentation VMRVIKAS CHAUHAN
 
GST DRAFT key points by CA Firm Challani Agarwal & Associates, Pune.
GST DRAFT key points by CA Firm Challani Agarwal & Associates, Pune.GST DRAFT key points by CA Firm Challani Agarwal & Associates, Pune.
GST DRAFT key points by CA Firm Challani Agarwal & Associates, Pune.Nandkumar Jethani
 
Appliacbility Issues & Solutions under GST by CA. VInay Bhushan
Appliacbility Issues & Solutions under GST by CA. VInay BhushanAppliacbility Issues & Solutions under GST by CA. VInay Bhushan
Appliacbility Issues & Solutions under GST by CA. VInay BhushanTAXPERT PROFESSIONALS
 
Goods and Services Tax
Goods and Services TaxGoods and Services Tax
Goods and Services TaxHemantSingh366
 
Input tax credit – apportionment & blocked credit
Input tax credit – apportionment & blocked creditInput tax credit – apportionment & blocked credit
Input tax credit – apportionment & blocked creditKISHAN KESHRI
 
Short Term Course on GST- Input Tax Credit
Short Term Course on GST- Input Tax CreditShort Term Course on GST- Input Tax Credit
Short Term Course on GST- Input Tax CreditSandeep Gupta
 
Basic tenets of GST - Dr Sanjiv Agarwal
Basic tenets of GST - Dr Sanjiv AgarwalBasic tenets of GST - Dr Sanjiv Agarwal
Basic tenets of GST - Dr Sanjiv AgarwalD Murali ☆
 
Key Highlights of the revised model GST Law
Key Highlights of the revised model GST LawKey Highlights of the revised model GST Law
Key Highlights of the revised model GST LawKaran Puri
 
Key Highlights of the revised model GST Law
Key Highlights of the revised model GST LawKey Highlights of the revised model GST Law
Key Highlights of the revised model GST LawKaran Puri
 
Key Highlights of the revised model GST Law
Key Highlights of the revised model GST LawKey Highlights of the revised model GST Law
Key Highlights of the revised model GST LawKaran Puri
 
DECODING GST- INPUT TAX CREDIT OF CGST, SGST AND IGST
DECODING GST- INPUT TAX CREDIT OF CGST, SGST AND IGSTDECODING GST- INPUT TAX CREDIT OF CGST, SGST AND IGST
DECODING GST- INPUT TAX CREDIT OF CGST, SGST AND IGSTCa Ashish Garg
 
Framework of GST Laws
Framework of GST LawsFramework of GST Laws
Framework of GST LawsAdmin SBS
 
Gst Model Act - Important things to know
Gst Model Act - Important things to knowGst Model Act - Important things to know
Gst Model Act - Important things to knowAshish Chaudhary
 
Renewed hopes on GST - Dr Sanjiv Agarwal
Renewed hopes on GST - Dr Sanjiv AgarwalRenewed hopes on GST - Dr Sanjiv Agarwal
Renewed hopes on GST - Dr Sanjiv AgarwalD Murali ☆
 

Semelhante a GST - Input tax credit (20)

Input Tax Credit - ITC
Input Tax Credit - ITCInput Tax Credit - ITC
Input Tax Credit - ITC
 
Overview about gst
Overview about gstOverview about gst
Overview about gst
 
Overview about gst
Overview about gstOverview about gst
Overview about gst
 
Gst impact on manufacturer 21.07.2017
Gst impact on  manufacturer 21.07.2017Gst impact on  manufacturer 21.07.2017
Gst impact on manufacturer 21.07.2017
 
CA Vikas singh chauhan gst presentation VMR
CA Vikas singh chauhan gst presentation VMRCA Vikas singh chauhan gst presentation VMR
CA Vikas singh chauhan gst presentation VMR
 
GST DRAFT key points by CA Firm Challani Agarwal & Associates, Pune.
GST DRAFT key points by CA Firm Challani Agarwal & Associates, Pune.GST DRAFT key points by CA Firm Challani Agarwal & Associates, Pune.
GST DRAFT key points by CA Firm Challani Agarwal & Associates, Pune.
 
Appliacbility Issues & Solutions under GST by CA. VInay Bhushan
Appliacbility Issues & Solutions under GST by CA. VInay BhushanAppliacbility Issues & Solutions under GST by CA. VInay Bhushan
Appliacbility Issues & Solutions under GST by CA. VInay Bhushan
 
Goods and Services Tax
Goods and Services TaxGoods and Services Tax
Goods and Services Tax
 
Input tax credit – apportionment & blocked credit
Input tax credit – apportionment & blocked creditInput tax credit – apportionment & blocked credit
Input tax credit – apportionment & blocked credit
 
Short Term Course on GST- Input Tax Credit
Short Term Course on GST- Input Tax CreditShort Term Course on GST- Input Tax Credit
Short Term Course on GST- Input Tax Credit
 
Basic tenets of GST - Dr Sanjiv Agarwal
Basic tenets of GST - Dr Sanjiv AgarwalBasic tenets of GST - Dr Sanjiv Agarwal
Basic tenets of GST - Dr Sanjiv Agarwal
 
Key Highlights of the revised model GST Law
Key Highlights of the revised model GST LawKey Highlights of the revised model GST Law
Key Highlights of the revised model GST Law
 
Key Highlights of the revised model GST Law
Key Highlights of the revised model GST LawKey Highlights of the revised model GST Law
Key Highlights of the revised model GST Law
 
Key Highlights of the revised model GST Law
Key Highlights of the revised model GST LawKey Highlights of the revised model GST Law
Key Highlights of the revised model GST Law
 
DECODING GST- INPUT TAX CREDIT OF CGST, SGST AND IGST
DECODING GST- INPUT TAX CREDIT OF CGST, SGST AND IGSTDECODING GST- INPUT TAX CREDIT OF CGST, SGST AND IGST
DECODING GST- INPUT TAX CREDIT OF CGST, SGST AND IGST
 
Framework of GST Laws
Framework of GST LawsFramework of GST Laws
Framework of GST Laws
 
Gst Model Act - Important things to know
Gst Model Act - Important things to knowGst Model Act - Important things to know
Gst Model Act - Important things to know
 
GST FAQ
GST FAQGST FAQ
GST FAQ
 
GST India - Key issues & Concerns (July 2017)
GST India - Key issues & Concerns (July 2017)GST India - Key issues & Concerns (July 2017)
GST India - Key issues & Concerns (July 2017)
 
Renewed hopes on GST - Dr Sanjiv Agarwal
Renewed hopes on GST - Dr Sanjiv AgarwalRenewed hopes on GST - Dr Sanjiv Agarwal
Renewed hopes on GST - Dr Sanjiv Agarwal
 

Mais de Dhruv Seth

S&A Knowledge Series - General Insurance Advisory
S&A Knowledge Series - General Insurance AdvisoryS&A Knowledge Series - General Insurance Advisory
S&A Knowledge Series - General Insurance AdvisoryDhruv Seth
 
S&A Knowledge Series - Cash disallowances under Income Tax
S&A Knowledge Series - Cash disallowances under Income TaxS&A Knowledge Series - Cash disallowances under Income Tax
S&A Knowledge Series - Cash disallowances under Income TaxDhruv Seth
 
Real estate - Income tax implications
Real estate - Income tax implicationsReal estate - Income tax implications
Real estate - Income tax implicationsDhruv Seth
 
S&A Knowledge Series - GST on goods transport agency
S&A Knowledge Series - GST on goods transport agencyS&A Knowledge Series - GST on goods transport agency
S&A Knowledge Series - GST on goods transport agencyDhruv Seth
 
S&A Knowledge Series - Company fresh start scheme 2020
S&A Knowledge Series - Company fresh start scheme 2020S&A Knowledge Series - Company fresh start scheme 2020
S&A Knowledge Series - Company fresh start scheme 2020Dhruv Seth
 
S&A Knowledge Series - Sec 50C implications under income tax act
S&A Knowledge Series - Sec 50C implications under income tax actS&A Knowledge Series - Sec 50C implications under income tax act
S&A Knowledge Series - Sec 50C implications under income tax actDhruv Seth
 
S&A Knowledge Series - Budget & budgetary controls
S&A Knowledge Series - Budget & budgetary controlsS&A Knowledge Series - Budget & budgetary controls
S&A Knowledge Series - Budget & budgetary controlsDhruv Seth
 
S&A Knowledge Series - Important Disallowances under sec 40A income tax
S&A Knowledge Series - Important Disallowances under sec 40A income taxS&A Knowledge Series - Important Disallowances under sec 40A income tax
S&A Knowledge Series - Important Disallowances under sec 40A income taxDhruv Seth
 
S&A Knowledge Series - Reduced rate of tax under income tax
S&A Knowledge Series - Reduced rate of tax under income taxS&A Knowledge Series - Reduced rate of tax under income tax
S&A Knowledge Series - Reduced rate of tax under income taxDhruv Seth
 
S&A Knowledge Series - Finance Act 2020
S&A Knowledge Series - Finance Act 2020S&A Knowledge Series - Finance Act 2020
S&A Knowledge Series - Finance Act 2020Dhruv Seth
 
S&A knowledge series - Financial assistance to startup
S&A knowledge series - Financial assistance to startupS&A knowledge series - Financial assistance to startup
S&A knowledge series - Financial assistance to startupDhruv Seth
 
S&A knowledge series - Financial assistance to MSME
S&A knowledge series - Financial assistance to MSMES&A knowledge series - Financial assistance to MSME
S&A knowledge series - Financial assistance to MSMEDhruv Seth
 
Rise of Minority Shareholders - Companies Act 2013
Rise of Minority Shareholders - Companies Act 2013Rise of Minority Shareholders - Companies Act 2013
Rise of Minority Shareholders - Companies Act 2013Dhruv Seth
 
Budget Publication 2018
Budget Publication 2018Budget Publication 2018
Budget Publication 2018Dhruv Seth
 
Blockchain & Cryptocurrency
Blockchain & CryptocurrencyBlockchain & Cryptocurrency
Blockchain & CryptocurrencyDhruv Seth
 
Digitalization of accounting
Digitalization of accounting Digitalization of accounting
Digitalization of accounting Dhruv Seth
 
Important provisions about RERA
Important provisions about RERAImportant provisions about RERA
Important provisions about RERADhruv Seth
 
GST - E-Commerce
GST - E-CommerceGST - E-Commerce
GST - E-CommerceDhruv Seth
 
Real Estate (Regulation & Development) Act, 2016
Real Estate (Regulation & Development) Act, 2016Real Estate (Regulation & Development) Act, 2016
Real Estate (Regulation & Development) Act, 2016Dhruv Seth
 
How to prepare for GST
How to prepare for GSTHow to prepare for GST
How to prepare for GSTDhruv Seth
 

Mais de Dhruv Seth (20)

S&A Knowledge Series - General Insurance Advisory
S&A Knowledge Series - General Insurance AdvisoryS&A Knowledge Series - General Insurance Advisory
S&A Knowledge Series - General Insurance Advisory
 
S&A Knowledge Series - Cash disallowances under Income Tax
S&A Knowledge Series - Cash disallowances under Income TaxS&A Knowledge Series - Cash disallowances under Income Tax
S&A Knowledge Series - Cash disallowances under Income Tax
 
Real estate - Income tax implications
Real estate - Income tax implicationsReal estate - Income tax implications
Real estate - Income tax implications
 
S&A Knowledge Series - GST on goods transport agency
S&A Knowledge Series - GST on goods transport agencyS&A Knowledge Series - GST on goods transport agency
S&A Knowledge Series - GST on goods transport agency
 
S&A Knowledge Series - Company fresh start scheme 2020
S&A Knowledge Series - Company fresh start scheme 2020S&A Knowledge Series - Company fresh start scheme 2020
S&A Knowledge Series - Company fresh start scheme 2020
 
S&A Knowledge Series - Sec 50C implications under income tax act
S&A Knowledge Series - Sec 50C implications under income tax actS&A Knowledge Series - Sec 50C implications under income tax act
S&A Knowledge Series - Sec 50C implications under income tax act
 
S&A Knowledge Series - Budget & budgetary controls
S&A Knowledge Series - Budget & budgetary controlsS&A Knowledge Series - Budget & budgetary controls
S&A Knowledge Series - Budget & budgetary controls
 
S&A Knowledge Series - Important Disallowances under sec 40A income tax
S&A Knowledge Series - Important Disallowances under sec 40A income taxS&A Knowledge Series - Important Disallowances under sec 40A income tax
S&A Knowledge Series - Important Disallowances under sec 40A income tax
 
S&A Knowledge Series - Reduced rate of tax under income tax
S&A Knowledge Series - Reduced rate of tax under income taxS&A Knowledge Series - Reduced rate of tax under income tax
S&A Knowledge Series - Reduced rate of tax under income tax
 
S&A Knowledge Series - Finance Act 2020
S&A Knowledge Series - Finance Act 2020S&A Knowledge Series - Finance Act 2020
S&A Knowledge Series - Finance Act 2020
 
S&A knowledge series - Financial assistance to startup
S&A knowledge series - Financial assistance to startupS&A knowledge series - Financial assistance to startup
S&A knowledge series - Financial assistance to startup
 
S&A knowledge series - Financial assistance to MSME
S&A knowledge series - Financial assistance to MSMES&A knowledge series - Financial assistance to MSME
S&A knowledge series - Financial assistance to MSME
 
Rise of Minority Shareholders - Companies Act 2013
Rise of Minority Shareholders - Companies Act 2013Rise of Minority Shareholders - Companies Act 2013
Rise of Minority Shareholders - Companies Act 2013
 
Budget Publication 2018
Budget Publication 2018Budget Publication 2018
Budget Publication 2018
 
Blockchain & Cryptocurrency
Blockchain & CryptocurrencyBlockchain & Cryptocurrency
Blockchain & Cryptocurrency
 
Digitalization of accounting
Digitalization of accounting Digitalization of accounting
Digitalization of accounting
 
Important provisions about RERA
Important provisions about RERAImportant provisions about RERA
Important provisions about RERA
 
GST - E-Commerce
GST - E-CommerceGST - E-Commerce
GST - E-Commerce
 
Real Estate (Regulation & Development) Act, 2016
Real Estate (Regulation & Development) Act, 2016Real Estate (Regulation & Development) Act, 2016
Real Estate (Regulation & Development) Act, 2016
 
How to prepare for GST
How to prepare for GSTHow to prepare for GST
How to prepare for GST
 

Último

The Ultimate Guide to Drafting Your Separation Agreement with a Template
The Ultimate Guide to Drafting Your Separation Agreement with a TemplateThe Ultimate Guide to Drafting Your Separation Agreement with a Template
The Ultimate Guide to Drafting Your Separation Agreement with a TemplateBTL Law P.C.
 
xLran: Open source AI for legal hackers.
xLran: Open source AI for legal hackers.xLran: Open source AI for legal hackers.
xLran: Open source AI for legal hackers.mike689707
 
Patents and AI: Current Tools, Future Solutions
Patents and AI: Current Tools, Future SolutionsPatents and AI: Current Tools, Future Solutions
Patents and AI: Current Tools, Future SolutionsAurora Consulting
 
An introduction to Indian Contract Act, 1872 by Shraddha Pandit
An introduction to Indian Contract Act, 1872 by Shraddha PanditAn introduction to Indian Contract Act, 1872 by Shraddha Pandit
An introduction to Indian Contract Act, 1872 by Shraddha PanditSHRADDHA PANDIT
 
Classification of Contracts in Business Regulations
Classification of Contracts in Business RegulationsClassification of Contracts in Business Regulations
Classification of Contracts in Business RegulationsSyedaAyeshaTabassum1
 
Women and the World of Climate Change- A Conceptual Foundation by Shraddha Pa...
Women and the World of Climate Change- A Conceptual Foundation by Shraddha Pa...Women and the World of Climate Change- A Conceptual Foundation by Shraddha Pa...
Women and the World of Climate Change- A Conceptual Foundation by Shraddha Pa...SHRADDHA PANDIT
 
Corporate Sustainability Due Diligence Directive (CSDDD or the EU Supply Chai...
Corporate Sustainability Due Diligence Directive (CSDDD or the EU Supply Chai...Corporate Sustainability Due Diligence Directive (CSDDD or the EU Supply Chai...
Corporate Sustainability Due Diligence Directive (CSDDD or the EU Supply Chai...Dr. Oliver Massmann
 
ArtificiaI Intelligence based Cyber Forensic Tools: Relevancy and Admissibili...
ArtificiaI Intelligence based Cyber Forensic Tools: Relevancy and Admissibili...ArtificiaI Intelligence based Cyber Forensic Tools: Relevancy and Admissibili...
ArtificiaI Intelligence based Cyber Forensic Tools: Relevancy and Admissibili...Anadi Tewari
 
Islamabad High Court Judges wrote a letter to Supreme Judicial Council.pdf
Islamabad High Court Judges wrote a letter to Supreme Judicial Council.pdfIslamabad High Court Judges wrote a letter to Supreme Judicial Council.pdf
Islamabad High Court Judges wrote a letter to Supreme Judicial Council.pdfNo One
 

Último (10)

The Ultimate Guide to Drafting Your Separation Agreement with a Template
The Ultimate Guide to Drafting Your Separation Agreement with a TemplateThe Ultimate Guide to Drafting Your Separation Agreement with a Template
The Ultimate Guide to Drafting Your Separation Agreement with a Template
 
Criminalizing Disabilities & False Confessions
Criminalizing Disabilities & False ConfessionsCriminalizing Disabilities & False Confessions
Criminalizing Disabilities & False Confessions
 
xLran: Open source AI for legal hackers.
xLran: Open source AI for legal hackers.xLran: Open source AI for legal hackers.
xLran: Open source AI for legal hackers.
 
Patents and AI: Current Tools, Future Solutions
Patents and AI: Current Tools, Future SolutionsPatents and AI: Current Tools, Future Solutions
Patents and AI: Current Tools, Future Solutions
 
An introduction to Indian Contract Act, 1872 by Shraddha Pandit
An introduction to Indian Contract Act, 1872 by Shraddha PanditAn introduction to Indian Contract Act, 1872 by Shraddha Pandit
An introduction to Indian Contract Act, 1872 by Shraddha Pandit
 
Classification of Contracts in Business Regulations
Classification of Contracts in Business RegulationsClassification of Contracts in Business Regulations
Classification of Contracts in Business Regulations
 
Women and the World of Climate Change- A Conceptual Foundation by Shraddha Pa...
Women and the World of Climate Change- A Conceptual Foundation by Shraddha Pa...Women and the World of Climate Change- A Conceptual Foundation by Shraddha Pa...
Women and the World of Climate Change- A Conceptual Foundation by Shraddha Pa...
 
Corporate Sustainability Due Diligence Directive (CSDDD or the EU Supply Chai...
Corporate Sustainability Due Diligence Directive (CSDDD or the EU Supply Chai...Corporate Sustainability Due Diligence Directive (CSDDD or the EU Supply Chai...
Corporate Sustainability Due Diligence Directive (CSDDD or the EU Supply Chai...
 
ArtificiaI Intelligence based Cyber Forensic Tools: Relevancy and Admissibili...
ArtificiaI Intelligence based Cyber Forensic Tools: Relevancy and Admissibili...ArtificiaI Intelligence based Cyber Forensic Tools: Relevancy and Admissibili...
ArtificiaI Intelligence based Cyber Forensic Tools: Relevancy and Admissibili...
 
Islamabad High Court Judges wrote a letter to Supreme Judicial Council.pdf
Islamabad High Court Judges wrote a letter to Supreme Judicial Council.pdfIslamabad High Court Judges wrote a letter to Supreme Judicial Council.pdf
Islamabad High Court Judges wrote a letter to Supreme Judicial Council.pdf
 

GST - Input tax credit

  • 1. Guide to INPUT TAX CREDIT under GST
  • 2. Introduction 2 Input Tax credit under GST One of the most important pillars of an effective GST is the availability of Input Tax Credit (ITC) to remove the cascading effect of taxes on transactions. In the enactment these important provisions have been mentioned in Sec 16 to 18 of the CGST Act and the respective State Acts. Input Tax Credit (ITC) is the backbone of the GST regime. GST is nothing but a value added tax on goods & services combined. It is these 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. The procedures and restrictions laid down in these provisions are important to make sure that there is seamless flow of credit in the whole scheme of transition without any misuse. Thus, the clarity of rules of availment and utilization will have significant impact on making GST a taxpayer-friendly tax. Therefore to act as a ready reckoner we have devised this presentation wherein we would be guiding you about the available ITC A. General rule with regard to availability of credit B. Conditions for availment of ITC C. Credits barred by the law from being availed D. Analysis of the Input Tax Rules and Reversal of ITC
  • 4. GENERAL CONDITIONS 4 Sec 16 of the CGST and SGST Act Every registered person can subject to certain limitations and conditions can avail ITC of the goods and services which have been received during the year. Certain pertinent points with regard to the general availability are as follows :- A. The intention of utilize the goods or services for providing output services is of utmost importance. It is not necessary that all the goods and services which have been procured have to be utilized. Even if goods have been procured and kept in stock then also the credit of the tax paid on such goods shall be available to us. B. The credit shall only be available if the goods or services so procured are to be used “in the course OR furtherance of his business”. Thus if any goods or services have been used which are not in the course of or for the expansion of the business shall not be available. Therefore there needs to be at least an indirect nexus between the procurement and utilization. C. Such Input credit is available in the electronic ledger of the assessee.
  • 5. GENERAL CONDITIONS 5 • IGST • CGST • SGST IGST • CGST • IGST CGST • SGST • IGST SGST NOTES A. In terms of the act the credit of IGST can be used against tax liability of all acts. However, the set off hierarchy would be as mentioned above. B. Credit available in the ledger of CGST cannot be set off against tax liability under SGST and vice versa. However both can be set off against IGST.
  • 7. CONDITIONS for ELIGIBILITY  You are in possession of a tax invoice or debit note; AND  The goods or services have been actually received; AND  The tax on such goods and services has been actually paid to the government by the supplier of goods or services; AND  You have filed your return; AND  Such Inputs have not been used for exempt supply (excluding export); AND  In case of receipt of goods or services in tranches, the last tranche has been actually received 7
  • 9. RESTRICTED CREDITS Any ITC available on purchase of Motor Vehicle or availing Rent-a-cab services Caveat – If any vehicles are bought for goods transportation then that would be available. 9
  • 10. RESTRICTED CREDITS 1. Foods and Beverages 2. Outdoor Catering 3. Beauty Treatment 4. Health Services 5. Cosmetic 10 6. Membership of a Club 7. Life and Health Insurance 8. Travel benefits extended to employees on vacation NOTES A. Items 1-5 credit shall be available to those who are providing similar output services. B. Item 7 – Credit shall be available if mandated by Government as mandatory OR while providing output taxable services
  • 11. RESTRICTED CREDITS 11 NOTES A. In case any goods or services are used in an immovable property and such expenses are NOT capitalised then the credit of such goods and services shall be available.  Works contract services for creation of an immovable property unless the same is intended to be sold.  Goods and services used for construction of an immovable property for self use such as office.
  • 12. RESTRICTED CREDITS 12 NOTES A. The act does not have any definition of the words “personal consumption”. It can be said to include those expenses wherein the company is NOT the beneficiary of such goods or services.  Purchase from a dealer covered under composition scheme  Goods or services used for personal consumption  Goods lost, stolen, destroyed, written or disposed off
  • 14. IMPORTANT Points  The vendor should be paid towards the services within 180 days of date of invoice else the credit is liable to be reversed. Proportionate credit would be available if part of the money is retained in terms of performance obligations.  Input shall be availed (not necessarily utilised) within 1 year from date of issue of invoice or before the 20th October of the following financial year whichever is earlier.  In case the assessee is providing some exempt services (not export sales) then partial reversal of the Input tax credit would be required.  In case of any discrepancy between returns filed by supplier and claim by us, we would be allowed 2 months to rectify else it would be reversed. 14
  • 15. GUIDELINES  Ensure correct GSTIN of the company is used and the same is informed to all the vendors of the company  In case of employee reimbursements the employees should ensure they give the GSTIN of the company before generation of the bills.  Ensure company has a bill capturing mechanism so that credit on any bill is not missed.  The vendors charge correct GST (IGST or CG+SG) to avoid any issues later on.  Since tax is to be paid by the recipient upon supply from unregistered dealer hence it needs to be taken care that it is availed in the subsequent month 15
  • 16. 16 THANKS! Any questions? You can find us at gst@sethspro.com | www.sethspro.com