1. Input Tax Credit

2. “Used or intended to be used in the course or furtherance of Business”
Highlights of ITC 1
Availability of ITC on ‘ALL Inward Supplies’
Across the Supply Chain- Manufacturer till it reaches consumer
Across the States 2
Furtherance of Business Concept
“Used or intended to be used in the course or furtherance of Business”

3. ITC Claim
Possession of Tax Invoice / Debit or Credit Note / Supplementary Invoice issued by a supplier 1 2
The said goods/services have been received 3
Returns have been filed 4
The tax charged has been paid to the government by the supplier 5
Matching of Invoices and Reversal

4. Technology is the key
GST is transaction based technology driven compliance
B to B to G to B data exchange through GSTN
Triangulation of Business records with GSTN

5. Outward Supplies Register
Ratna Steels Portal
Super Cars Ltd Portal
Ratna Steels GSTR-1A
FORM GST MIS-1
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
AUG 20
AUG 15
AUG 16
AUG 11
AUG 10
AUG 21 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
R.J. Automobiles 6
1,00,000
18,000
Inward Supplies Register
Books of Super Cars Ltd for July’17
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
FORM GST MIS-1 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

6. ITC on Transition to GST

7. ITC carried forwarded in the Last Return
Amount of CENVAT / VAT credit carried forward in a return to be allowed
ITC Carried forwarded as per the the Last return
Admissible as Input Tax credit
in GST
All the Returns under existing law are furnished for the last 6 months
Liability of Tax on Goods in Transit

8. Unavailed ITC on capital goods
Unavailed cenvat credit and VAT credit on capital goods, not carried forward in a return
Current statute, Cenvat and Input Vat is allowed as Input Tax Credit
Admissible as Input Tax credit
in GST

9. ITC on Closing Stock
Credit of eligible duties and taxes in respect of inputs held in stock to be allowed as ITC
A registered taxable person, who was not liable to be registered under the earlier law 1 2
who was engaged in the manufacture or sale of exempted goods 3
First stage dealer or a second stage dealer or a registered importer 4
Switching from Composition Dealer to Regular Dealer

10. Eligibility Conditions
100% Of ITC
The closing stock held must be used or intended to be used for taxable supplies.
Passes on the benefit of such credit by way of reduced prices to the recipient
You are eligible for input tax credit under GST
The date of invoices or any other prescribed duty or tax paying documents must be within 12 months from the date of transitioning to GST
The supplier of services is not eligible for any abatement under the Act
If you have invoices or any other prescribed duty/
tax paying documents for the closing stock
40 % Of ITC
If you do not have invoices or any other prescribed duty/tax paying documents for the closing stock

11. ITC Entitlement in GST

12. 1 2 3 Business Scenarios Opting for Voluntary Registration
Switching from Composition Scheme to Regular 3
Apply for new registration
Applied for registration within 30 days from the date on which you become liable to register and
Been granted registration

13. ITC Eligibility- Registration
Inputs
Capital Goods
Input tax credit can be claimed after reducing the tax paid on such capital goods by 5 percentage point per quarter of a year or part thereof from the date of invoice
The residual life will be 60 months
Inputs Tax Credit on inputs lying in Stock will be eligible

14. Claim of ITC
Make a declaration, electronically in FORM GST ITC-01 furnishing full details input and capital goods
In cases where the aggregate value of claim on account of Central, State and Integrated taxes exceeds Rs. 2.0 Lakhs shall be duly certified by a practising chartered accountant or cost accountant.

15. Apportionment of credit and Blocked credits

16. Blocked Credit: Negative List
Motor vehicles, except when they are supplied in the usual course of business or providing the following taxable services viz., Transportation of passengers, transportation of goods, imparting training on motor driving skills
Food and beverages
Outdoor catering
Beauty treatment
Health services
LTA
Goods and / or services are used primarily for personal use or consumption of any employee
Cosmetic and plastic surgery
Health services
Membership of a club
Health and fitness centre
Life & Health insurance
Goods and services or both received by a taxable person for construction of an immovable property (other than plant or machinery) even if used in the course or furtherance of business
5 Mins
Goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples
Rent-a-cab, life insurance and health insurance – except where Govt. notifies the services which are obligatory for an employer to provide to its employees.

17. Apportionment and Reversal of credit
Partly for Business and non-business purpose
Partly for taxable and exempted
On Inward supplies covered under Negative List

18. Manner of Calculation of Eligible ITC
Scenario 2
Scenario 1
ITC which are NOT identifiable being exclusively for the purpose of non-business (T1), exclusively for effecting exempt supply (T2) and covered under negative list(T3). In this case, Common Credit (C2) needs to be arrived
Attributable ITC identifiable intended to be used exclusively for the purpose of non-business (T1), exclusively for effecting exempt supply (T2) and covered under negative list(T3)
Identify the value of ITC which are attributable exclusively for Taxable + Zero Rate Supply. This will be T4
C2 = C1-T4
To determine ineligible credit incase of exempt supply (D1) and non business purpose (D2)
Total Credit (T) reduced by tax paid on T1,T2 and T3 will be the eligible credit (C1)
D2 = C2 x 5%
D1 = (E-F) x C2
E=Exempt Turnover
F=Total Turnover
C1 = T–(T1+T2+T3)
C3=C2-(D1+D2)
Eligible common ITC (C3)
Eligible ITC will be T4+C3

19. ITC Reconciliation
Before the due date of filing the return for the month of September of the subsequent year, the aggregate amount of D1 and D2 are calculated for year
ITC computed in the periodic return found to be lesser than the annual computation will be added to e-liability ledger and 24% needs to be paid from April of the next FY till the date of payment
In case, if the annual computed amount is lesser than periodic return, refund to be claimed by September

20. Restriction of ITC Entitlement
Taxes paid in on Demand
- On account of fraud, wilful misstatement or suppression of facts
Input tax credit only on receipt of last lot or instalment
Filing of September return for the succeeding financial year or filing of annual return for the current financial year whichever is earlier
Input tax credit not available for the recipient on payment of advance
Non-payment of value of the goods/services and tax to the supplier within 180 days

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