Input Tax Credit under Model GST Law
CA Sankaran P [email protected] Mob:9444943175
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Introduction
• Details of provisions related to ITC are stated in Chapter-V
• Contain in section 16-22
• Trader also get the benefices of ED as ITC and service provider
also get the VAT as ITC availment for setoff.
• ITC as self assessed in the return of a taxable person.
• Credited to the electronic credit ledge.
• Utilization IGST ------ IGST,CGST & SGST.
•
CGST ------ CGST & IGST
•
SGST------- SGST & IGST
CA Sankaran P [email protected] Mob:9444943175
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Important Definitions
Section-2(19) : Capital Goods
2(21) CGST
2(51) IGST
2(52) Input
2(53) Input Services
2(54) Input Service Distributors
2(55) Input Tax
2(56) Input Tax Credit
2(59) Invoice
2(93) SGST
2(96) Tax
2(97) Tax period
2(98) Taxable person
2(99) Taxable Supply
2(100) Non taxable Supply
CA Sankaran P [email protected] Mob:9444943175
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ITC Availment Eligibility
•Availement can be made by only registered taxable person
•ITC invoice date shall be with in the period of 1year from the date
of issue of tax invoice.
•Possession of tax invoice/Debit Note/other tax paying document
issued by the supplier registered under this Act is must.
•Recipient shall have receive the good and Or services
•Tax charged in respect of the supply has been actually paid to the
account of the appropriate government.
•Recipient have the intension to use or intend to be use the good or
service in the course of business or furtherance of business and
shall furnish the return
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Restrictions
•Receipt of Good against on invoice in lots or instalment entitle to
take credit ITC upon receipt of the last lot or instalment.
•Failure to make the payment for supply of services along with tax
within the period of 3 month from the date of issue of invoice, ITC
availed shall be added to the output tax along with interest.
• Depreciation under the Income tax claimed on tax element is
ineligible for availment.
•Not entitle to availed ITC after the month of September following
the end of the financial year Or after furnishing the Annual return
which ever is earlier.
•If usage of ITC availed Goods and Or services utilised partly for
business and partly for non business eligibility is proportional.
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Restrictions-Cont
• If usage of ITC availed Goods and Or services utilised partly for
Zero rated supplies and partly for Exempted supplies eligibility
is proportional.
• Exempt supply shall include tax payable by recipient on reverse
charges
• Banking Company /financial institution/ NBFC can avail ITC
either on propionate basis or avail 50% of the eligible ITC in
every month by opting and option cannot be withdrawn during
the financial year.
• Change in constitution due to sale, merger, demerger etc., ITC
transferable to a new unit provided the transfer of business with
provision of transfer of liability.
CA Sankaran P [email protected] Mob:9444943175
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Ineligibility of ITC
• ITC on motor Vehicle and other conveyance are ineligible
exception
• Supply: In the course of business( Dealer) in vehicle
• Used for providing services of transport of Good/ passenger,
Importing training /driving, flying navigating such vehicle are
conveyance.
• ITC of supply of Good and services of food and beverages,
Outdoor catering, beauty treatment, health service, cosmetics
and plastic surgery. Except same category that is Inward and
Outward are same taxable category of the above.
• Membership of the club, Health and finess centre
CA Sankaran P
ganeshandsankaran@gmail.
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Ineligibility of ITC-Cont
• Rent a cab, LIC, Health Insurance except where the Govt.
notifies such are oblicatories on the part of employer.
• Travel benefits to employees on vocation
• Works Contract on immovable property except on Plant and
Machinery and same category on service.
• Goods and or services supply to a taxable person for
constructions on immovable property on his own account even
if it is used for furtherance of business.
CA Sankaran P [email protected] Mob:9444943175
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Availability of ITC on special
circumstances
•
ITC available on input held in stock semi finished good sand
finished goods on the day immediately preceding the day from
which he becomes liable to pay tax on the person who is applied
for registration with in 30 days on which he becomes liable for
registration.
• ITC available on input held in stock semi finished good sand
finished goods on the day immediately preceding the date of grand
of registration for person who takes registration.
CA Sankaran P [email protected] Mob:9444943175
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Composition
• Persons switching over composition scheme to regular he is also
entitle to take credit on input held in stock semi finished good sand
finished goods on the day immediately preceding the day from
which he becomes liable to pay tax on the person who is applied
for registration with in 30 days on which he becomes liable for
registration.
• Exempted goods and service becomes taxable he is entitle to take
credit on input held in stock semi finished good sand finished
goods on the day immediately preceding the day from which he
becomes liable to pay tax on the person who is applied for
registration with in 30 days on which he becomes liable for
registration.
• Taxable person switchover to composition scheme or his supply
becomes non taxable he has to reverse the ITC credit on the stock
or remit the tax and balance of ITC will laps.
CA Sankaran P [email protected] Mob:9444943175
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Job work
• Present position is same
CA Sankaran P
ganeshandsankaran@gmail.
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Input Service Distribution
• CGST Credit can be distributed as IGST & IGST Credit as IGST, if
the units are in different state.
• IGST Credit can be distributed as CGST & CGST Credit can be
distributed as CGST, if the units are in same state.
• SGST Credit can be distributed as IGST & IGST Credit as IGST, if
the units are in different state.
• IGST Credit can be distributed as SGST & SGST Credit can be
distributed as SGST, if the units are in same state.
CA Sankaran P [email protected] Mob:9444943175
CA. P. Sankaran M.Com, FCA, DISA (ICAI)
Ganesh & Sankaran
Chartered Accountants
26, Govindu Street,
T.Nagar, Chennai – 600017.
E- Mail : [email protected]
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