Gst section 16 - Input Tax Credit – Eligibility and Conditions

Gst section 16 - Input Tax Credit – Eligibility and Conditions

Chapter V - Eligibility and conditions for taking credit

1. Chakraborty Kapoor & Co. LLP Cost & Management Accountants Goods and Service Tax: Input Tax Credit – Eligibility and Conditions CMA C.P. Kalra CMA Arunava Chakraborty CMA Md. Rehan Cost & Management Accountants Email: [email protected] Contact No. 011-26275907

2. Input Tax Credit – Chapter V Section. 16 Eligibility and conditions for taking credit Chakraborty Kapoor & Co. LLP ©

3. What are the Conditions to Claim Input Tax Credit u/s - 16? Section 16(1) To claim ITC, a p erson has to be registered in normal scheme. ITC can only be availed when input is intended to be used in the course of furtherance of his business ITC can be availed subject to condition and restriction as prescribed and in the manner specified in Sec.49 Chakraborty Kapoor & Co. LLP ©

4. S. No. Input tax Credit against output tax CGST SGST/UTGST IGST 1 CGST X 2 SGST/UTGST X 3 IGST First Second Third Order for Credit Set-off Credit Mechanism Manner of Set off- Sec.49 – Input credit Adjustment Chakraborty Kapoor & Co. LLP ©

5. Conditions to Claim Input Tax Credit u/s – 16…. Such claim shall be credited to the electronic ledger of registered person Chakraborty Kapoor & Co. LLP ©

6. Conditions to Claim Input Tax Credit u/s – 16…. Section 16(2) A registered person can claim Input Credit Tax only if : (a) He is in possession of Tax Invoice or debit note issued by a supplier, or such other tax paying document as may be prescribed. (b) He has received Goods or Services or Both ( c) Payment of Tax by the input Supplier for his supply actually has been paid to the Government according to section 41 Note: Sec. 41 –claim of credit on self assessment basis and it shall be credited to electronic credit ledger on provisional basis. This provisional credit can be only be utilized for payment of self assessed output tax as per the return Chakraborty Kapoor & Co. LLP ©

7. Conditions to Claim Input Tax Credit u/s – 16 …. Section 16(2 ) ( Contd ……) ( d) He has furnished GST Returns under section 39: Provided that goods against invoice are received in lots or installments, registered person can take ITC upon receipt of last lot or installment . Provided further that payment of Supply along-with Tax (consideration) has to be paid within 180 days from date of issue of invoice by supplier (Other than the supplies on which tax is payable under RCM). Failing to pay within 180 days, input tax credit will be added to his output liabilities along-with interest thereon. Chakraborty Kapoor & Co. LLP ©

8. Conditions to Claim Input Tax Credit u/s – 16…. Section 16(2) ( Contd ……) Provided also that the recipient shall be entitled to avail of the credit of input tax on payment made by him of the amount towards the value of supply of goods or services or both along with tax payable thereon. (Goods are delivered by supplier to a recipient or any other person on direction of a registered person (whether registered person acting as agent or otherwise), it shall be deemed goods are received by such registered person by way of transfer of document of title to goods or otherwise Chakraborty Kapoor & Co. LLP ©

9. Conditions to Claim Input Tax Credit u/s – 16…. Section 16(3) ITC shall not be allowed if depreciation under Income Tax Act 1961 is claimed on Tax component of the of the cost of capital goods and plant and machinery . + Chakraborty Kapoor & Co. LLP ©

10. Conditions to Claim Input Tax Credit u/s – 16…. Don’t be Late: Section 16(4) ITC cannot be availed in respect of any Invoice or Debit note for supply of goods and services after filing the return u/s 39 for the month of September (ordinarily 20 th October) following the end of financial year or filing the annual return (ordinarily 31 st December) whichever is earlier. Chakraborty Kapoor & Co. LLP ©

11. Connect us CMA C. P. Kalra CMA Arunava Chakraborty CMA Md. Rehan Chakraborty Kapoor & CO. LLP Mob: [phone] Email : [email protected] Website: www.cmackc.com Address : F-1210, LGF, Chirtanjan Park, New Delhi, 110019