GST & YOU

Input Tax Credit under GST

What is Input Tax Credit Input Tax Credit is commonly known as ITC. ITC is a machenism, by which one can offset the output tax liability against the Input Tax already paid on Purchases of Good and/ or Services. In GST, Input Tax Credit is available on IGST, CGST and SGST. GST provides seamless flow of ITC from the manufacturer of goods till it consumed. ITC is available on the expenses incurred for the furtherence of the business.

Conditions to avail Input Tax Credit You should have a valid Tax Invoice/ Debit Note/ Credit Note issued by registed person. Goods and/ or Services should be received. Tax has been paid to Government by Supplier. You and Your Supplier must have filed monthly return GSTR-3. It shall deemed that the taxable person has received the goods before or during the movement of goods by the way of transfer of documents.

How to avail Input Tax Credit CGST - ITC IGST CGST SGST - ITC SGST IGST IGST- ITC IGST SGST CGST

How to avail Input Tax Credit Ratna Steels Delhi TAX INVOICE Item Name Qty Rate Amount Spare Parts 6 1500 9000 CGST @ 9% 810 SGST @ 9% Total Amount 10620 Vishnu Motors Delhi Dayal Motors Punjab Outward Supply Outward Supply Inward Supply Super Cars Ltd Delhi Total Input Tax CGST 810 SGST TAX INVOICE Item Name Qty Rate Amount Spare Parts 4 2000 8000 CGST @ 9% 720 SGST @ 9% Total Amount 9440 Total Output Tax CGST 720 SGST IGST TAX INVOICE Item Name Qty Rate Amount Spare Parts 2 2000 4000 IGST @ 18% 720 Total Amount 4720

How to avail Input Tax Credit Ratna Steels Punjab TAX INVOICE Item Name Qty Rate Amount Spare Parts 6 1500 9000 IGST @ 18% 1620 Total Amount 10620 Vishnu Motors Delhi Dayal Motors Punjab Outward Supply Outward Supply Inward Supply Total Input Tax IGST 1620 TAX INVOICE Item Name Qty Rate Amount Spare Parts 4 2000 8000 CGST @ 9% 720 SGST @ 9% Total Amount 9440 Super Cars Ltd Delhi Total Output Tax IGST 720 CGST SGST TAX INVOICE Item Name Qty Rate Amount Spare Parts 2 2000 4000 IGST @ 18% 720 Total Amount 4720

Outward Supplies Register Ratna Steels Portal Super Cars Ltd Portal Ratna Steels GSTR-1A In.No Amt GST Ratna Steels Outward Supplies Register 6 1,00,000 18,000 No Qty Amt GST 6 100 1,00,000 18,000 7 50 50,000 9,000 MAY 10 MAY 15 MAY 21 MAY 16 MAY 20 MAY 11 8 25 25,000 4,500 Super Cars Ltd GSTR-1 10 50 50,000 9,000 Ratna Steels GSTR-1 Tot. 225 2,25,000 40,500 Payment Payment Ratna steels Super Cars Ltd Rev Automobiles 6 1,00,000 18,000 Inward Supplies Register Books of Super Cars Ltd for April Outward Supplies Register No Qty Amt GST No Qty Amt GST 6 100 1,00,000 18,000 6 100 1,00,000 18,000 6 100 1,00,000 18,000 1 80 88,000 15,840 1 80 88,000 15,840 7 50 50,000 9,000 2 60 66,000 11,880 2 60 66,000 11,880 8 25 25,000 4,500 3 30 33,000 5,940 3 30 33,000 5,940 10 50 50,000 9,000 4 45 49,500 8,910 4 45 49,500 8,910 Tot. 225 2,25,000 40,500 6 1,00,000 18,000 Tot. 215 2,36,500 42,570

ITC 1 – Input Tax Credit Confirmation JULY 2017 AUGUST 2017 SEPTEMBER 2017 OCTOBER 2017 Return - July Return - August Return - September GSTR – 1 (10th Aug) Outward Supplies 25000 GSTR – 1 (10th Sep) Outward Supplies 15000 Transaction - July GSTR – 1 (10th Sep) Outward Supplies 8000 Inwards Supplies Outward Supplies Bill Supplier GST Customer 6 Ratna Steel 5000 1 Vishnu Motors 25000 10 GSTR – 2 (15th Aug) Inward Supplies 10000 GSTR – 2 (15th Sep) Inward Supplies 6000 GSTR – 2 (15th Sep) Inward Supplies 4000 GSTR – 3 (20th Aug) Outward Tax Liability 25000 Input Tax Credit 10000 Tax Paid 15000 GSTR – 3 (20th Sep) Outward Tax Liability 15000 Input Tax Credit 6000 Tax Paid 9000 GSTR – 3 (20th Sep) Outward Tax Liability 8000 Input Tax Credit 4000 Bill No. 6 got mismatch between Ratna Steel and Super Car Ltd. Ratna Steel did not upload that invoice in his GSTR 1 Ratna Steel did not accept that in GSTR 1A generated by portal. ITC Details (21st Aug) ITC 1 Confirmation 5000 ITC Details (21st Sep) ITC 1 Confirmation 6000 Tax Paid 9000 ITC 1A Mismatch for JUL 5000 ITC 1A Mismatch for JUL 5000 ITC Details (21st Sep) ITC 1 Confirmation 4000 Transaction - August Transaction – September AUGUST 2017 Inwards Supplies Outward Supplies Bill Supplier GST Customer 7 Ratna Steel 6000 2 Vishnu Motors 15000 SEPTEMBER 2017 Inwards Supplies Outward Supplies Bill Supplier GST Customer 7 Ratna Steel 4000 2 Vishnu Motors 8000

Conditions when ITC can’t be availed Registration not applied for within 30 days from the date on which you become liable to register. On goods and services taken from Composite dealer. Service received but payment has not been done in 3 months. This will be reversed and added as output tax liability to the recipient of such goods and services along with interest.

Conditions when ITC can’t be availed On goods and services used for making exempt supplies. EXEMPTED [Covered under GST] TAXABLE Goods Inward Supply Super Cars Ltd Delhi Outward Supply NON TAXABLE [Not covered under GST] TAXABLE Services ZERO RATED [Export, SEZ]

Conditions when ITC can’t be availed On goods and services not consumed for outward supplies. FREE SAMPLES TAXABLE Goods GIFT Inward Supply Super Cars Ltd Delhi Disposed as PERSONAL CONSUMPTION STOLEN TAXABLE Services DESTROYED LOST

Conditions when ITC can’t be availed Food beverages, Outdoor catering, beauty treatment, health services, plastic surgery. TAXABLE Goods DOES NOT FALL UNDER THE SAME CATEGORY OF GOODS Inward Supply Super Pvt Ltd Delhi Outward Supply TAXABLE Services DOES NOT FALL UNDER THE SAME CATEGORY OF SERVICES

Conditions when ITC can’t be availed On motor vehicle and other conveyance FURTHER SUPPLY OF SUCH VEHICLE Inward Supply Super Pvt Ltd Delhi Not used in TAXABLE Purchase of Motor Vehicle TRANSPORTATION OF PASSENGERS TRANSPORTATION OF GOODS IMPARTING TRAINING ON DRIVING SUCH VEHICLE SUPPLY OF GOODS AND SERVICES

Conditions when ITC can’t be availed On the purchase of Capital Goods Inward Supply Super Pvt Ltd Delhi Depreciation TAXABLE Purchase of CAPITAL Goods IF CALCULATED ON THE VALUE INCLUDING THE TAX PAID ON PURCHASE

Exceptional Scenarios to avail ITC Switching from Composition scheme to Regular Dealer. When Exempted goods and/ or Services become taxable. When goods and/ or service partly used for business and partly for other purpose. When goods and/ or services are used partly for taxable supplies and partly for Exempt supplies. When goods are received in lots or instalments.

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