Input Tax Credit 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 in the supply chain after allowing credit for the inputs/input services and capital goods. The invoice method of value added taxation will be followed in the GST too, viz., the tax paid at the time of receipt of goods or services or both will be eligible for set-off against the tax payable on supply of goods or services or both, based on the invoices with a special emphasis on actual payment of tax by the supplier. 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 taxation without any misuse.
GST Input Tax credit – Queries Asked by Clients to CA
Author Details Further, if you become liable to pay tax and apply for same within 30 days then you can take input credit on stock held in trade on the day immediately preceding the day of liable to registration. For example, you applied for the voluntary registration and got the same by 20th October. In this case you can claim input tax credit on the stock held on 19th October. And if you become liable to pay tax on 1 October. You applied for the registration and got the same by 20th October. In this case you can claim input tax credit on the stock held on 30 September. So input tax credit is only disallowed in case of exempted supplies and not on ZERO rated supplies
i) On the stock you have on which you have already claimed input tax credit should be paid back to government. ii) Any balance of input tax credit available with you shall lapse.
i) Motor vehicles and conveyances except:
a) the vehicle is used for the supply of other vehicles or conveyances b) the rule shall not apply if the vehicle is used for transportation of passengers c) the vehicle is used for imparting training on driving, flying, navigating such vehicle or conveyances d) used for transportation of goods.
ii) food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery except where the category of Inward and outward supply is same or the component belongs to a mixed or composite supply under GST iii) sale of membership in a club, health, fitness centre iv) ITC would not available for rent-a-cab, health insurance and life insurance v) any services which are made obligatory for an employer to provide its employee by the Indian Government under any current law in force vi) in the case of travel, benefits extended to employees on vacation such as leave or home travel concession vii) ITC of any works contract service viii) ITC for the construction of an immovable property cannot be availed, except where the input service is used for further work contract services ix) No ITC will be provided for materials used in the construction of immovable property of for furtherance of business. x) Goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples are not available for claiming ITC under GST. MJL & Co, Jaipur (Chartered Accountants)Email – MJLco.jaipur@gmail.com (ph – 0141-4915113) Recommended Articles
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