1. Input Tax Credit (ITC) 1 CA MUKUND CHOUHAN Mumbai & Surat

2. INPUT Tax Credit (ITC) Continue….2
INPUT Tax Credit (ITC) Continue….
ITC is allowed on any Supply of Goods / Service and both.
Intended to be used in the course or furtherance of his business.
Documents of ITC [Rule 1(1) of draft Rule of ITC]
Invoice issued by Supplier
Debit Note issue by Supplier
Bill of entry ( in case of import )
Invoice prepared for RCM Supply
Invoice prepared for Supply by Un-registered Person.
Document issued by ISD
If Goods received in lots / installment then ITC shall be entitled on receipt of Last lot / installment.

3. INPUT Tax Credit (ITC) Continue….3
INPUT Tax Credit (ITC) Continue….
Recipient of Supplier of goods / services / both have to pay amount of invoice along with tax within 180 day from the date of issue of invoice [Sec. 16(2)]
No provision of part payment.
ITC reversed and amount added to the output Tax liability
Interest have to pay
Receipt of supply of Goods / Service entitled to take ITC on payment made by him after 180 days.
But no Credit is available of interest paid by him.

4. INPUT Tax Credit (ITC) Continue….4
INPUT Tax Credit (ITC) Continue….
The amount of Tax ( CGST / SGST / IGST ) should be deducted from value of Capital Goods, while Calculating depreciation for the I.T. Act.
[Sec. 16(3)]
ITC for any invoice / Debit Note of Financial Year can be availed upto the return filed for the month of September or furnishing of Annual Return, Whichever is earlier following the end of F.Y. [Sec. 16(4)]

5. Apportionment of ITC between Taxable and Exempt Supply5
Apportionment of ITC between Taxable and Exempt Supply
If the goods or Services used partly for purpose of Business and partly for other purpose.
Then amount of ITC is allowed to take Credit, so much which is attributable to the purpose of business
Eligible amount of ITC will be calculated according to Draft Rule 7 of input Tax Credit.
ITC attributable to Zero-rated Supply is eligible
Export
Deemed export to SEZ units / Developer

6. 6
Negative List
ITC on Motor Vehicle and other Conveyances not allowed.
But ITC on Motor Vehicle is allowed to :-
Traders of vehicle for further supply or
Person engaged in Transportation of Passenger or
Imparting Training
For transportation of goods.
‘Goods’ defined under Sec. 2(52) of CGST Act.

7. Negative List Continue….7
Negative List Continue….
ITC is not allowed for following supply of goods/Service and both
Food and beverages, Outdoor Catering, Beauty treatment, Health Service, Cosmetic and plastic Surgery
Except where inward Supply used for making an outward supply of same Category
As an element of taxable composite or mixed supply.
Membership of club , health and Fitness Center.
Rent-a-Cab, Life Insurance and Health Insurance
Except Govt. notifies the services are obligatory under any Law.
Except where inward supply used for making an outward supply of same Category.

8. Negative List Continue….8
Negative List Continue….
Travel benefits extended to employees on vacation.
Works contract Services when supplied for construction of immovable property
Other than plant & machinery
Except where it is an input Services for further supply or works contract service.
Example: sub-contract for works contract.
Works contract has defined U/s 2(119) of CGST Act.
Goods and Services received for construction of immovable property. Example-Cement steel received for construction of Factory Building etc.
Other than Plant & Machinery
Example-Angel, channel, MS sheet, etc for in-house fabrication of machinery.

9. Negative List 9
Goods or Services or both used for personal consumption
Goods lost, stolen, destroyed, written off or disposed off by way of gift and free sample
Plant & Machinery means apparatus, equipment, and machinery fixed to earth by foundation or structured support.

10. Credit in Special Circumstances10
Credit in Special Circumstances
Person, who became liable to registration, must apply within 30 days
Registration may be granted to him later on,
What if registration finally not granted ?
Shall be entitled to take Credit of input Tax in respect of input, WIP and Finished goods held in Stock
A person takes registration voluntarily .
Person ceases to pay tax under composition scheme.
When exempt supply of Goods and Services or both by a registered person becomes taxable supply.

11. Credit in Special Circumstances Continue….11
A registered person shall not be entitled to take credit after the expiry of one year from the date of issue of invoice.
ITC of registered person will be transferred to new entity, if change in constitution due to sale, merger, demerger, amalgamation , Lease or transfer of business.
In Case of supply of Capital Goods or Plant & Machinery, the registered person shall pay on amount equal to proportionate credit taken or the tax liability on Transaction value, which ever is higher.
Supply of refractory bricks, module, dies, jigs, and, and fixtures are supplied as scrap, liable to tax on Transaction value.

12. Credit in Special Circumstances12
Credit in Special Circumstances
Condition:-
5% ITC will be allowed for every quarter of use of capital Goods.
Registered person shall submit a declaration within 30 days in Form GST ITC-01 on the common portal
Declaration is need to be filed for actual credit on the basis of invoice of input, WIP, and Finished Goods lying in Stock.
Declaration need to be certified by chartered / Cost Accountant, if the amount of credit exceed 2 Lakhs.

13. ITC on input and Capital Goods send to Job Worker13
Principal manufacture shall be allowed to take credit on inputs send to Job Worker.
Principal manufacturer entitle to take ITC, if input directly send to job Worker.
Input after being processed, should be returned to Principal manufacturer within one year.
After taking Credit of Capital Goods, Principal manufacturer can send to Job Worker.
Principal Manufacturer can directly send Capital Goods to Job Worker and avail Credit without brought to his place of business.

14. ITC on input and capital Goods send to Job worker Continue….14
ITC on input and capital Goods send to Job worker Continue….
Where the input and capital goods are not brought back by Principal within a period of one years or three years respectly, then it will be considered supply by Principal to Job Worker, when the said input or Capital Goods were Sent out.

15. Distribution of ITC by Input service Distributor15
ISD shall distribute the Credit of
CGST as CGST or IGST and
IGST as IGST or CGST
ISD will issue as invoice
Amount of Credit distributed shall not exceed the amount of credit availed.
Credit on input Service attributable to a particular recipient, shall be transfer to that recipient.
Credit of tax, attributable to more than one recipient, than it should be distributed as pro-rate basis of turnover in a State.

16. Thank You
CA. MUKUND CHOUHAN