The GST regime promises seamless credit on goods and services across the entire supply chain with some exceptions like supplies charged to tax under composition scheme and supply of exempted goods and/or services. ITC is considered to be backbone of the GST regime.Quick guide on Input Tax Credit.
For Example: Mr A, registered person in Telangana purchases the goods from Mr B, registered person in Telangana. Mr. A has paid Rs 300 as GST on his purchases to Mr. B. Mr.A is liable to pay Rs 500 as GST on his sales. Then Mr.A can reduce Rs 300 from the tax payable of Rs 500 and he can pay the balance amount of Rs 200.
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The registered person can avail the ITC on inward supplies only if the following conditions are satisfied
Note: ITC Can be claimed in respect of IGST paid on imports, reverse charge, credit received from ISD etc even though they are not reflecting in GSTR 2B.
When the supplier makes the GST payment, then the taxpayer can re-avail the ITC reversed by him by filing GSTR 3B for next tax periods
Input Tax credit in invoices or debit notes relating to invoices pertaining to a financial year can be availed at any time till 30th November of the succeeding financial year or date of filing of annual return whichever is earlier.
Note: The above time limit is not applicable for re-availing the ITC that has been reversed earlier
ITC of tax paid on almost every inputs and input services used for supply of taxable goods or services or both is allowed under GST except a small list of items provided u/s 17(5). The taxable person cannot take ITC in the following cases.
Yes. Input tax credit will be available in full with respect to inputs and capital goods, subject to fulfilment of the prescribed conditions under section 16(2) of the CGST Act.
The credit on goods/ services used partly for business and partly for non-business purposes will be allowed proportionately to the extent it is attributable for business purposes.
Yes, the principal is allowed to take input tax credit of inputs/capital goods not received by him if they are directly sent to the premises of job worker.
The conditions prescribed under Rule 41 of the CGST Rules, 2017 are:
Yes, in case of supply of capital goods or plant and machinery on which input tax credit has been taken, the registered person will have to pay an amount equal to
No, transfer of unutilized input tax credit is permissible only when there is change in constitution of the business with the specific provision of transfer of liabilities.
The ITC is allowed provisionally for 2 months. If mismatch continues even after communication to the concerned parties, the ITC would be reversed automatically.
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