Oct 13, 2017
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GST Input Tax Credit overview of the input tax credit sections as per GST Act

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GST Input tax credit:

GST Input tax credit means tax  incurred on any purchase or acquisition of goods and services by a taxable person. Thus, for the purpose of making a taxable supply in the course or furtherance of business.

  1. No registered person shall entitled to GST input tax credit in respect of any supply of goods or services or both to him unless:

(a) he is in possession of a tax invoice or debit note issued by a supplier registered under this Act. Or such other tax paying documents as may be prescribed;
(b) he has received the goods or services or both

(c) subject to the provisions, the tax charged in respect of specified supply actually paid to the Government. So pain in either cash or through utilization of input tax credit admissible in respect of the said supply;

(d) however he need to furnished the return.

State definition of GST Input tax credit

Input tax” in relation to a registered person, means the central tax, State tax, integrated tax or Union territory tax charged on any supply of goods or services or both made to him and includes—

  1. The integrated goods and services tax charged on import of goods
  2. The tax payable under the provisions of sub-sections (3) and (4) of section 9 of The Central Goods And Services Tax Act, 2017
  3. Tax payable under the provisions of sub-sections (3) and (4) of section 5 of The Integrated Goods and Services Tax Act
  4. The tax payable under the provisions of sub-sections (3) and (4) of section 9 of The respective State Goods and Services Tax Act
  5. Tax payable under the provisions of sub-sections (3) and (4) of section 7 of The Union Territory Goods and Services Tax Act

⇒But does not include the tax paid under the composition levy (GST composition scheme rules).

State definition of GST Input Tax Credit under GST Act

⇒“Input tax credit” means the credit of input tax

State the important or highlighted points on GST input tax credit under GST Act

⇒Highlighted points of Input tax credit:

Levied a taxes called as CGST,SGST,IGST,UTGST on  

  • In case supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under specific section of given act and such rate not exceed 20% in case CGST and UTGST and not exceed 40% in case IGST and in case of SGST depend upon that of particular state related specific GST India act.
  • Additionally, The supply of petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel, shall be levied with effect from such date as may be notified by the Government on the recommendations of the Council.
  • In Case of specific categories of supply of goods and services or both under CGST, SGST, IGST,UTGST the tax shall paid by recipient on reverse charge basis and all provisions relating to this acts shall  applied to recipient who considered liable to pay tax.
  • However Supply of taxable goods or services or both by a supplier, who not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all provisions relating to this acts shall be applied to recipient who is liable to pay tax.
  • In case of specific categories services paid by the electronic commerce operator if such services in relation to  supplies through it and all provisions relating to this acts shall applied to electronic commerce operator who is liable to pay tax.

 Meaning of GST Input Tax Credit Rules under GST Act?

  • Input tax credit rules mean the rules made by The Central Board of Excise and Customs under Goods and Service Tax Act on the recommendation of council.

 1: Documentary requirements and conditions for claiming input tax credit

2: Reversal of input tax credit in case of non-payment of consideration

3: Claim of credit by a banking company or a financial institution

4: Procedure for distribution of input tax credit by Input Service Distributor

5: Manner of claiming credit in special circumstances

6: Transfer of credit on sale, merger, amalgamation, lease or transfer of a business

7: Manner of determination of input tax credit in certain cases and reversal thereof

8: Manner of determination of input tax credit in respect of capital goods and reversal thereof in certain cases

9: Manner of reversal of credit under special circumstances

10: Conditions and restriction in respect of inputs and capital goods sent to the job worker

What are the conditions for claiming the Input Tax Credit?

  • Conditions for claiming input tax credit

  1. Input tax credit shall so availed by a registered person only
  2. However, If all the applicable particulars as prescribed in Chapter (Invoice Rules) contained in the said document, and the relevant information,as contained in the said document. Then it need to furnished in FORM GSTR-2 by such person.
  3. No input tax credit shall availed by a registered person . So done only in respect of any tax that has so paid in pursuance of any fraud, willful misstatement or suppression of facts.

 

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Renuka is a Final Year LL.B. student at Siddharth College of Law. She has done her Bachelors in Banking & Insurance and has also completed her Masters in Business Management . She likes to participate in legal workshops and Moot Courts. Besides her interest in law, she has a keen aptitude for legal research and is good at putting her analysis into words.

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