ITC GST Sayee
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![Page 1: ITC GST Sayee](https://reader033.fdocuments.in/reader033/viewer/2022052522/58cff49b1a28abfc0a8b49ff/html5/thumbnails/1.jpg)
INPUT TAX CREDIT
CHAPTER V*THE CENTRAL/STATE GOODS & SERVICE TAX 2016
- SAYEE PREM. K
*Revised Model GST LAW
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GSTSingle Tax RegimeTo Digitize Indirect Tax system
Eliminate Cascading Effect (Tax on Tax)
It is Destination / Consumption Based Taxation
Supply of Goods/Services
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ITC
IGST
CGSTSGST
COMPONENTS OF ITC
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HOW TO CLAIM ITC?
Registered taxable person shall claim
Input Tax Credit available in
Electronic Credit Ledger
ITC is available on Inputs, Capital Goods and Services that are used or intended to be used in the business
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CLAIM ITC
Year 1 – 1/3rd of ITC
Year 2 – 1/3rd of ITCYear 3 – 1/3rd of ITC
PIPELINES & TELECOM TOWER #
*Thus for Capital goods other than the above ITC on Capital Goods utilized in ONE instalment.
# Telecommunication Tower fixed to earth by foundation or structural support including foundation and structural support
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Tax Invoice or Debit Note issued by a “Registered Supplier”
Received the Goods #
Tax Paid or ITC Utilized in E-Ledger A/C
Filed return U/S 34
CONDITIONS TO CLAIM ITC:
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#Received the Goods means
Goods are delivered by the supplier
To a recipient or
If recipient before or during moment of goods
Directs to deliver to Agent or otherwise either by way of transfer of documents of title to goods or otherwise
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Goods/ Services are received in various lot/instalments?
What if?
ITC is available only on receipt of the final lot or instalment.
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Recipient of ServiceSupplier of Service
ISSUES INVOICE
INVOICE
MAKES PAYMENT ON VALUE OF INVOICE
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If,
3 MONTHS
INVOICE DATE
Payment on such supply of service
Exceeds
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Recipient of Service
ITC + Interest
ITC availed by
BECOMES LIABILITY
LIABLE TO PAY
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Validity of invoices to Claim ITC
INVOICE
F.Y.2017-18
Return Filed U/S 34Sep 2018
Annual Return
Whichever is Earlier
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ITC Not Allowed
Cost of Capital Goods Rs.5,00,000
ITC on CG @ 5% Rs. 25,000
Asset Value Income Tax Rs.5,25,000
Depreciation @ 10% Rs. 52,500
Depreciation on Capital Goods in INCOME TAX
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Case AConsumption of Inputs, Capital
Goods
Business PurposesOther Purposes
ITC AVAILABLE ONLY ON CONSUMPTION OF INPUTS,CG FOR BUSINESS PURPOSES
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Case BConsumption of Inputs,
Capital Goods
Taxable SupplyExempted Supply
Includes ZERO RATED SUPPLYIncludes Supply charged on Reverse Charge Basis
ITC AVAILABLE ONLY ON CONSUMPTION OF INPUTS,CG FOR TAXABLE SUPPLY
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Supplying Services by way of
Accepting Deposits
Extending Loans & Advances
CASE-B Consumption of Inputs, Capital Goods
Taxable SupplyExempted Supply
AVAIL 50% of *ELIGIBLE ITC EVERY
MONTH
Banks/Financial Institutions including NBFCs
OR
*ELIGIBLE ITC: ITC ON INPUTS, CG and SERVICES IN A MONTH
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INELIGIBLE ITC1) TAX PAID U/S 9 (Composition Levy)2) Personal Consumption3) Goods
o LOST, o STOLEN, o DESTROYED,o Written Offo Disposed of by way of Gift or Free Samples
4) Any Tax Paid U/S 67, 89 or 905) Works Contract Services when supplied for construction
of Immovable Property (except P&M), where it is an input for further supply of Works Contract Services.
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INELIGIBLE ITC Cont.,
i.e., ITC is ALLOWED If Motor Vehicles are used in above Taxable Supplies
Transportation of Goods
Further Supply of such Vehicle
or Conveyances
Transport of Passengers
Imparting on Driving, Flying,
Navigating such vehicles
or conveyances
6) ITC ineligible on Motor Vehicles and Other Conveyances Except
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INELIGIBLE ITC Cont.,7) a) ITC is ineligible on Supply of Goods & Services on
Food & Beverages Outdoor Catering Beauty Treatment Health Services Cosmetic & Plastic Surgery
Inward Supply of
FOODOutward
Supply of FOOD
ITC is ELIGIBLE
“ITC is eligible on above if inputs used are for making outputs of same category”
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INELIGIBLE ITC Cont.,7) b) ITC is ineligible on Supply of Goods & Services on
Membership ofi. A Clubii. Health & Fitness Centre
7) c) ITC is ineligible on Supply of Goods & Services on
Rent-A-Cab Life Insurance Health Insurance
In 7.c) ITC is eligible, if Govt. notifies the services which are obligatory for an employer to provide
to its employees
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8) Goods or Services received by Taxable Person for CONSTRUCTION of an Immovable
Property(except PLANT & MACHINERY)
Even when used in course or furtherance of business
on his own account
Re-construction Renovation Additions Alterations Repairs
Includes Apparatus, Equipment, Machinery, Pipelines, Telecom Tower
Excludes Land, Building or any other Civil
Structures
INELIGIBLE ITC Cont.,
PLANT & MACHINERYCONSTRUCTION
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SCENARIO 1BECOMES LIABLE TO REGISTER
APPLIES FOR REGISTRATION
HE IS GRANTED SUCH REGISTRATION
LIABLE TO PAY TAX
He is eligible to claim ITC on
The Inputs held as Stock, The Inputs contained in Semi Finished/ Finished Goods in Stock
W.E.F 1ST JULY 2017HELD AS ON 30TH JUNE 2017
MR. X
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SCENARIO 2APPLIES FOR REGISTRATION
HE IS GRANTED SUCH REGISTRATION
REGISTRATION IS GRANTED
He is eligible to claim ITC on
The Inputs held as Stock, The Inputs contained in Semi Finished/ Finished Goods in Stock
W.E.F 1ST JULY 2017HELD AS ON 30TH JUNE 2017
U/S 23 (3) (VOLUNTARY REGISTRATION)
MR. X
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SCENARIO 3CEASES TO PAY
HE WILL BECOME LIABLE TO PAY TAX
LIABLE TO PAY TAX
He is eligible to claim ITC on
The Inputs held as Stock, The Inputs contained in Semi Finished/Finished Goods in Stock
W.E.F 1ST JULY 2017 HELD AS ON 30TH JUNE 2017
U/S 9 (COMPOSITION LEVY)
U/S 8 (CGST/SGST LEVY & COLLECTION)
Capital Goods (Reduced by % points)
MR. X
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SCENARIO 4DEALING IN EXEMPTED GOODS
BECOMES TAXABLES GOODS
He is eligible to claim ITC on The Inputs held as Stock,
The Inputs contained in Semi Finished,Finished Goods in Stock (Relatable to such Exempt Supply)
W.E.F 1ST JULY 2017 HELD AS ON 30TH JUNE 2017
TURNS TO TAXABLE GOODS
Capital Goods (Used for Such Exempt Supply)(&)(Reduced by % points)
MR. X
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CRITERIA
ITC – Not Allowed
If Tax Invoices dated OLDER than 1Year
In above 4 Scenarios
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SCENARIO 5
TRANSFER OF THE BUSINESSWith a specific provision for transfer of Liabilities
RTP- A RTP- BUNUTILIZED ITC RTP-B Shall Transfer unutilized ITC to RTP-A
In Course of, SALE MERGER / DEMERGER AMALAGAMATION
LEASE
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SCENARIO 6
The Inputs held as Stock,
The Inputs contained in Semi Finished/
Finished Goods in Stock
W.E.F 1ST JULY 2017
HELD AS ON 30TH JUNE 2017
WISHES TO OPT & PAY TAX U/S 9 (COMPOSITION SCHEME)
Capital Goods (Reduced by % points)
Mr. X is a REGISTERED TAXABLE PERSON
All Goods/ Services becomes EXEMPT U/S 11At this juncture,
=ITC
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SCENARIO 7Disposes Capital Goods or Plant & MachineryMr. X had utilized ITC on such Goods earlier
RTP-Mr. X
o Refractory Bricks,
=ITC on Capital Goods(reduced by the % points)
The Tax on the Transaction Value U/S 15 (1)
OR
Whichever is highero Moulds & Dies,o Jigs & Fixtures
are supplied as scrap Mr. X may pay Tax on the Transaction Value U/S 15 (1)
Note: If
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ITC ON INPUTS SENT FOR JOB WORK
Inputs/Capital Goods
Principal U/S 55
Principal’s “Place of Business”
JOB WORKER
Directly
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TIME LIMITS: INPUTS SENT FOR JOB WORK
3 Years
The Time Limits of 1 year or 3 year shall not be applied in case of Moulds, Dies, Jigs and fixture, or Tools sent out to job worker for job work.
Inputs
Capital Goods
1 Year
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DATE OF DEEMED SUPPLY
Inputs/ Capital Goods
DirectlyDate for deemed supply: Job Worker receives Inputs/ Capital
GoodsPrincipal's "Place of Business"Date for deemed supply:
Inputs/ Capital Goods sent out from Place of Business
Principal referred u/s 55 shall take ITC on Inputs/ Capital Goods sent to Job Worker provided within Time Limits the job worker supplies back to Principal’s Place of business else it is deemed as Supply of Input/ Capital goods in the hands of Principal. Date for such Deemed Supply is as below
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Input Service Distributor - ISD
Definition U/S 2(54): ISD means an office of the supplier of goods and / or services which receives tax invoices issued u/s 28 towards receipt of input services and issues a prescribed document for the purposes of distributing the credit of CGST (SGST in State Acts) and / or IGST paid on the said services to a supplier of taxable goods and / or services having same PAN as that of the office referred to above
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ISD Issues Document
Document contains Amount of ITC
RECIPIENT OF CREDIT
-CGST
CGST
CGST IGST
Location: Different states/ Interstate
DISTRIBUTION OF ITC BY ISD U/S 21
IGST
IGST CGST
SGST
SGST
-SGSTIGST
-CGST
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-CGST
CGST
CGST
IGST
Location: Same state / IntrastateDISTRIBUTION OF ITC BY ISD U/S 21 CONT.,
SGST IGST
SGST -SGST
&
&
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CONDITIONS TO DISTRIBUTE ITC BY ISDPrescribed Document containing Prescribed DetailsAmount of credited distributed SHALL NOT EXCEED Amount of credit available for distribution Recipient should be Operational in that period
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CONDITIONS TO DISTRIBUTE ITC BY ISD CONT.,
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CONDITIONS TO DISTRIBUTE ITC BY ISD CONT.,
Relevant Period means
F.Y.2017-18 F.Y.2018-19
October 2018 II Quarter F.Y.2018-19
F.Y.2017-18F.Y.2018-19
NO Turnover
Credit Distributed Year
Credit Distributed Month
RELEVANT PERIOD
RELEVANT PERIOD
Credit Distributed Year
CASE 1: Recipient of Credit having Turnover during F.Y.2017-18
CASE 2: Recipient of Credit NOT having Turnover during F.Y.2017-18
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Recovery & Manner of Recovery
ITC Wrongly ClaimedRecovered from Registered Taxable PersonAs per Provisions of the Act
If ISD fails to comply provisions U/S 21 (Distribution of ITC by ISD) Distributes EXCESS credit to one or more recipients of credit, Same shall be recovered from such recipient Along with Interest And Provisions of Demand or Recovery U/S 66 or 67 respectively shall apply
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Thank You