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Important Definitions: |
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2(59) |
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Input |
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means any goods other than capital goods used or intended to be |
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used by a supplier in the course or furtherance of business. |
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2(19) |
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Capital Goods |
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means goods, the value of which is capitalised in the books of |
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accounts of person claiming the input tax credit and which are |
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used or intended to be used in course or furtherance of business. |
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2(60) |
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Input Service |
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means any service used or intended to be used by a supplier in the |
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course or furtherance of business. |
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2(63) |
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Input Tax Credit |
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means the credit of input tax. |
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2(62) |
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Input Tax |
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In relation to a registered person, means the central tax, state tax, |
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integrated tax or UT charged on supply of goods or services or both |
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made to him and includes – |
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a)the integrated goods and services tax charged on import of goods |
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b)the tax payable under the provisions of Section 9(3) and 9(4) |
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c)the tax payable under the provisions of Section 5(3) and 5(4) of IGST |
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d)the tax payable under the provisions of Section 9(3) and 9(4) of SGST |
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e)the tax payable under the provisions of Section 7(3) and 7(4) of UGST |
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But does not include the tax paid under composition levy. |
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2(82) |
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Output Tax |
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In relation to a taxable person, means the tax chargeable under |
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this Act on taxable supply of goods or services or both made by |
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him or by his agent but excludes tax payable by him on reverse |
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charge basis. |
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Sec 16 – Eligibility and Conditions: |
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Section |
Title |
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- Eligibility and Conditions Every registered person shall subject to such conditions
for taking ITC |
and restrictions as may be prescribed and in the manner |
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specified in Section 49, be entitled to take ITC on any supply |
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of goods or services or both to him which are used or |
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intended to be used in course or furtherance of his business |
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and the said amount shall be credited to electronic credit |
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ledger. |
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2. Notwithstanding anything contained in this section, no |
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registered person shall be entitled to the credit of any input |
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tax in respect of any supply of goods or services or both to him |
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unless - |
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a) he is in possession of tax invoice or debit note issued by a |
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supplier registered under this Act, or such other tax paying |
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doc as may be prescribed (Rule 36 of CGST Rules, 17) |
- Eligibility and Conditions Notwithstanding anything contained in this section, no
for taking ITC |
registered person shall be entitled to the credit of any input |
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tax in respect of any supply of goods or services or both to |
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him unless - |
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b) he has received the goods or services or both |
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Explanation - For the purposes of this clause, it shall be |
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deemed that the registered person has received the goods |
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where the goods are delivered by the supplier to a recipient |
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or any other person on directions of such registered person, |
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whether acting as agent or otherwise, before or during the |
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movement of goods, either by way of transfer of docs of title |
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to goods or otherwise; |
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c) Subject to provisions of Section 41, the tax charged in |
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respect of such supply has been actually paid to |
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Government, either in cash or through utilisation of ITC |
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admissible in respect of said supply |
Section |
Title |
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- Eligibility and Conditions Notwithstanding anything contained in this section, no
for taking ITC |
registered person shall be entitled to the credit of any input |
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tax in respect of any supply of goods or services or both to |
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him unless - |
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d) he has furnished the return under Section 39 |
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Provided that where goods against an invoice are received in |
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lots or instalments, the registered person shall be entitled to |
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take credit upon the receipt of last lot or instalment. |
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Provided further that where a recipient fails to pay supplier |
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of goods or services or both, other than supplies on which tax |
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is payable on reverse charge basis, the amount towards |
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value of supply along with tax payable thereon within a |
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period of 180 days from date of issue of invoice by supplier, |
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an amount equal to ITC availed by recipient shall be added to |
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his output tax liability, along with interest thereon, in such |
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manner as my be prescribed (Rule 37 of CGST Rules, 17) |
- Eligibility and Conditions Notwithstanding anything contained in this section, no
for taking ITC |
registered person shall be entitled to the credit of any input |
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tax in respect of any supply of goods or services or both to |
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him unless - |
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Provided also that the recipient shall be entitled to avail |
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credit of input tax payment made by him of the amount |
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towards value of supply of goods or services or both along |
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with tax payable thereon. |
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3. Where the registered person has claimed depreciation on |
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the tax component of the cost of capital goods and plant and |
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machinery under the provisions of Income Tax Act, 1961, the |
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input tax credit on said tax component shall not be allowed. |
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4. A registered person shall not be entitled to take ITC in |
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respect of any invoice/debit note for supply of |
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goods/services/both after due date of furnishing the return |
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under Section 39 for month of Sept following the end of FY to |
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which such invoice/debit note pertains or furnishing of |
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relevant annual return, whichever is earlier. |
Sec 17 – Apportionment and Blocked: |
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Section |
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17 |
Apportionment of Credit |
1. |
Where goods/services/both used by registered person |
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and Blocked Credits |
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partly for purposes of any business and partly for other |
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purposes, the amount of credit shall be restricted to so |
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much of the input tax as is attributable to purposes of his |
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business. |
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2. Where goods/services/both used by registered person |
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partly for effecting taxable supplies including zero rated |
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supplies and partly for effecting exempt supplies, amount |
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of credit shall be restricted to so much of input tax as is |
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attributable to the said taxable supplies including zero |
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rated supplies. |
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3. The value of exempt supply under sub-section (2) shall be |
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such as may be prescribed, and shall include supplies on |
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which recipient is liable to pay tax under RCM, transactions |
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in securities, sale of land subject to Para 5(b) of Schedule II, |
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sale of building (Rule 42 of CGST Rules, 17 – Inputs & Input |
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Services) & (Rule 43 of CGST Rules, 17- Capital Goods) |
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17 |
Apportionment of Credit |
4. |
A banking company or a financial institution including |
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and Blocked Credits |
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NBFC, engaged in supplying services by way of accepting |
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deposits, extending loans or advances shall have option to |
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either comply with provisions of sub-section (2), or avail of, |
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every month, an amount equal to 50% of eligible input tax |
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credit on inputs, capital goods and input services in that |
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month and the rest shall lapse. Option once exercised |
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applies for entire FY. Provided further that restriction of |
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50% shall not apply to tax paid on supplies made by one |
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registered person to another registered person having the |
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same PAN (Rule 38 of CGST Rules, 17) |
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5. Notwithstanding anything contained in Section 16(1) and |
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18(1), input tax credit shall not be available in respect of |
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the following namely – |
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a) Motor Vehicles and other conveyances except when they |
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are used – |
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I. For making taxable supplies, namely – |
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A.Further supply of such vehicles or conveyances or |
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B.Transportation of passengers or |
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C.Imparting training on driving, flying, navigating such |
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vehi/conve |
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ii. Transportation of goods |
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and Blocked Credits and 18(1), input tax credit shall not be available inApportionment of Credit Notwithstanding anything contained in Section 16(1)
respect of the following namely –
- b) The following supply of goods or services or both –
- Food and beverages, outdoor catering, beauty
treatment, health services, cosmetic and plastic
surgery except where an inward supply of goods or
services or both of a particular category is used by a
registered person for making an outward taxable
supply of the same category of goods or services or
both as an element of a taxable composite or mixed
supply
- membership of a club, health and fitness centre
iii. Rent-a-cab, life insurance and health insurance
except where –
- the government notifies the services which are
obligatory from an employer to provide to its
employees under any law for time being in force
- such inward supply of goods/services/both of a
particular category is used by registered person
for making an outward supply of same category
of goods/services/both/as part of taxable
composite/mixed supply
- Apportionment of Credit Notwithstanding anything contained in Section 16(1) and
and Blocked Credits 18(1), input tax credit shall not be available in respect of
the following namely –
- Travel benefits extended to employees on vacation
such as leave or home travel concession
- c) works contract services when supplied for construction
of an immovable property (other than plant or
machinery) except where it is an input service for
further supply of works contract service
- d) goods or services or both received by a taxable person
for construction of an immovable property (other than
plant or machinery) on his own account including when
such goods or services or both are used in the course or
furtherance of business.
Explanation – for the purposes of clause (c) and (d), the
expression ‘construction’ includes re-construction,
renovation, additions or alterations or repairs, to the
extent of capitalisation, to said immovable property
Section |
Title |
Covers |
- Apportionment of Credit Notwithstanding anything contained in Section 16(1) and
and Blocked Credits 18(1), input tax credit shall not be available in respect of
the following namely –
- e) goods or services or both on which tax has been paid
under Section 10
- f) goods or services or both received by a NR taxable
person except import of goods
- g) goods or services or both used for personal
consumption
- h) goods lost, stolen, destroyed, written off or disposed by
way of gift/free samples
- I) Any tax paid in accordance with Section 74, 129 and 130.
Explanation – For purposes of this chapter, the expression ‘plant and machinery’ means apparatus, equipment and machinery fixed to earth by foundation or structural support that are used for making outward supply of goods or services or both and includes such foundation and structural supports but excludes –
- Land, building or any other civil structure ii. Telecommunication towers
iii. Pipelines laid outside the factory premises
Sec 18 – Availability of Credit in Special Circumstances |
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Section |
Title |
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18 |
Availability of Credit in |
1. Subject to such conditions and restrictions as may be |
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special circumstances |
prescribed – |
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a) |
a person who has applied for registration within 30 days |
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from date on which he becomes liable for registration |
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and has been granted such registration shall be entitled |
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to take credit of input tax in respect of inputs held in |
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stock and inputs contained in semi-finished or finished |
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goods held in stock on day immediately preceding the |
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date from which he becomes liable to pay tax under |
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provisions of the act. |
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b) |
a person who takes registration under Section 25(3) |
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shall be entitled to take credit of input tax in respect of |
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inputs held in stock and inputs contained in semi- |
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finished or finished goods held in stock on day |
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immediately preceding the date of grant of |
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registration. |
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c) |
where any registered person ceases to pay tax under |
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Section 10, he shall be entitled to take credit of input tax |
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in respect of inputs held in stock and inputs contained |
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in semi-finished or finished goods held in stock and on |
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capital goods on day immediately preceding the date |
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from which he becomes liable to pay tax under Section |
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9. Provided credit on capital goods shall be reduced by |
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such percentage points as may be prescribed. |
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d) |
Where an exempt supply of goods/services/both by a |
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registered person becomes a taxable supply, such |
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person shall be entitled to take credit of input tax in |
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respect of inputs held in stock and inputs contained in |
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semi-finished or finished goods held in stock relatable to |
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such exempt supply and on capital goods exclusively |
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used for such exempt supply on the day immediately |
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preceding the date from which such supply becomes |
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taxable. Provided that the credit on capital goods shall |
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be reduced by such percentage points as may be |
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prescribed. |
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Section |
Title |
Covers |
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18 |
Availability of Credit in |
2. A registered person shall not be entitled to take ITC under |
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special circumstances |
sub-section (1) in respect of supply of goods or services or |
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both to him after the expiry of 1 year from the date of issue |
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of tax invoice relating to such supply. |
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3. Where there is a change in constitution of a registered |
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person on account of sale, merger, demerger, |
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amalgamation, lease or transfer of business with specific |
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provisions for transfer of liabilities, the said registered |
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person shall be allowed to transfer ITC which remains |
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unutilised in his ledger to such sold, merged, demerged, |
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amalgamated, leased or transferred business in such |
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manner as may be prescribed. |
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4. Where any registered person who has availed ITC opts to |
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pay tax under Section 10 or where goods/services/both |
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supplied by him become wholly exempt, he shall pay an |
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amount, by way of debit in electronic credit ledger or |
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electronic cash ledger, equivalent to credit of input tax in |
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respect of inputs held stock in stock and inputs contained in |
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semi-finished or finished goods held in stock and on capital |
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goods, reduced by such percentage points as may be |
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prescribed, on day immediately preceding date of |
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exercising of such option or, as the case maybe, date of such |
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exemption. Provided that after payment of such amount, |
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the balance of input tax credit, if any, lying in his electronic |
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ledger shall lapse. |
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5. The amount of credit under 18(1) and 18(4) shall be in |
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manner specified as Rule 44 of CGST Rules, 17 |
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6. In case of supply of capital goods or P&M, on which ITC has |
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been taken, the registered person shall pay an amount |
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equal to ITC taken on said capital goods or P&M reduced by |
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such percentage points as may be prescribed or TC of such |
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capital goods or P&M determined under Section 15, |
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whichever is higher [same as specified in Rule 44]. |
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Sec 19 – Taking ITC in respect of Inputs & CG –JW |
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Section |
Title |
Covers |
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19 |
Taking ITC in respect of |
1. The principal shall, subject to such conditions and |
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inputs & capital goods |
restrictions as may be prescribed, be allowed ITC on |
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sent for Job Work |
inputs/CG sent to a job-worker for job-work. |
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2. Notwithstanding anything contained in Section 16(2)(b), |
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the principal shall be entitled to take ITC on inputs/CG even |
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if inputs are directly sent to job worker for job work without |
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being first brought to his place of business. |
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3. Where inputs sent for job work are not received back by |
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principal after completion of job work or otherwise are not |
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supplied from place of business of job worker in accordance |
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with Section 143(1)(b) within 1 year (inputs)/3 years (CG) of |
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being sent out, it shall be deemed that such inputs had |
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been supplied by principal to job worker on day when the |
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said inputs/CG were sent out. Provided that where inputs |
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are sent directly to a job worker, the period 1/3 year shall be |
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counted from date of receipt of inputs by job worker. |
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4. Where inputs or capital goods are not returned to principal |
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within time stipulated in Section 143, it shall be deemed |
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that such inputs or capital goods had been supplied by |
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principal to JW on day when such inputs/capital goods were |
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sent out and said supply shall be declared in GSTR-1 and |
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principal shall be liable to pay tax along with interest – Rule |
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45(4) of CGST Rules, 17. |
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Sec 20 – Manner of Distribution of Credit by ISD |
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Section |
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- Manner of Distribution ISD shall distribute the credit of CT as CT/IT, IT as IT/CT, ST as
of Credit by ISD |
ST/IT and IT as IT/ST by way of issue of document containing |
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the amount of input tax being distributed in such manner as |
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may be prescribed. |
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2. The ISD may distribute credit subject to following conditions – |
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a) credit can be distributed to recipients of credit against a |
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doc containing such details as may be prescribed |
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b) amount of credit distributed shall not exceed the amount |
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of credit available for distribution |
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c) |
credit of tax paid on input service attributable to a |
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recipient of credit shall be distributed only to that |
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recipient |
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d) |
credit of tax paid on input services attributable to more |
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than one recipient of credit shall be distributed amongst |
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such recipients to whom input service is attributable and |
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such distribution shall be pro rata on basis of turnover in a |
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state of such recipient, during relevant period, to |
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aggregate of turnover of all such recipients to whom such |
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input service is attributable and which are operational in |
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current year, during the said relevant period. |
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e) |
Credit of tax paid on input services attributable to all |
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recipients of credit shall be distributed amongst such |
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recipients and such distribution shall be pro rata on basis |
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of turnover in a state of such recipient, during relevant |
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period, to aggregate of turnover of all recipients and |
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which are operational in current year, during said relevant |
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period. |
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Explanation – |
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?Relevantperiod – |
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?Ifrecipients of credit have turnover in state in FY |
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preceding the year during which credit is to be |
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distributed, said FY |
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?Ifsomeor all recipients of credit do not have |
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turnover in their states in FY preceding the year |
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during which credit is distributed, last quarter for |
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which details of such turnover of all recipients are |
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available, previous to the month during which |
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credit is distributed |
24 | P a g e
Input Tax Credit |
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SBS Wiki |
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www.sbsandco.com/wiki |
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Recovery of Credits: |
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Section |
Title |
Covers |
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21 |
Manner of Recovery of |
Where the ISD distributes the credit in contravention to Section |
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Credit distributed in |
20 resulting in excess of distribution of credit to one or more |
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excess |
recipients of credit, the excess credit so distributed shall be |
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recovered from such recipients along with interest and |
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provisions of Section 73 or Section 74 , as the case may be |
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mutatis mutandis apply for determination of amounts to be |
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recovered. |
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- Determination of ITC Where it appears to proper officer that ITC has been
wrongly availed orwrongly availed or utilised for any reason, other than
utilised for any reasonreason of fraud or any wilful-misstatement or suppression
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other than fraud or any |
of facts to evade tax, he shall serve notice on person who |
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wilful-misstatement |
or |
has wrongly availed or utilised ITC, requiring him to show |
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suppression of facts |
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cause why he should not pay amount specified in notice |
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along with interest and penalty. |
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2. The proper officer, after considering the representation, if |
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any, made by person chargeable with tax, determine the |
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amount of tax, interest and a penalty equivalent to 10% or |
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10,000 whichever is higher, due from such person and issue |
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an order. |
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3. The proper officer shall issue above order within 3 years |
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from the due date for furnishing of annual return for FY to |
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which ITC wrongly availed or utilised relates. |
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74 |
Determination of |
ITC |
1. Where it appears to proper officer that ITC has been |
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wrongly availed |
or |
wrongly availed or utilised by reason of fraud or any wilful- |
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utilised by reason |
of |
misstatement or suppression of facts to evade tax, he shall |
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fraud or any wilful- |
serve notice on person who has wrongly availed or utilised |
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m i s s t a t e m e n t |
o r |
ITC, requiring him to show cause why he should not pay |
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suppression of facts |
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amount specified in notice along with interest and penalty |
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equivalent to tax specified in notice. |
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2. The proper officer, after considering the representation, if |
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any, made by person chargeable with tax, determine the |
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amount of tax, interest and a penalty due from such person |
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and issue an order. |
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3. The proper officer shall issue above order within 5 years |
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from the due date for furnishing of annual return for FY to |
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which ITC wrongly availed or utilised relates. |
Section 54 - Refunds: |
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Refunds |
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Section |
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Covers |
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54 |
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Refunds |
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1. Any person claiming refund of any tax and interest, if any, |
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paid on such tax or any other amount paid by him, make an |
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application before expiry of 2 years from relevant date in |
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such form and manner as may be prescribed. |
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2. A registered person may claim refund of any unutilised |
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input tax credit at end of any tax period. Provided that no |
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refund of unutilised input tax credit shall be allowed in |
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cases other than – |
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I. Zero rated supplies made without payment of tax |
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ii. Where credit has accumulated on account of rate of tax |
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on inputs being higher than the rate of tax on output |
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supplies, except supplies of goods or services or both as |
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may be notified by Govt |
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Provided further no refund of unutilised ITC shall be |
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allowed in cases where goods are exported out of India |
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which are subject to export duty. |
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Provided also no refund of ITC shall be allowed, if supplier |
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of goods/services/both avails of drawback in respect of CT |
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or claims refund of IT on such supplies. |
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Sec 49(5) – Manner of Utilization: |
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Section |
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Relevant Sub-Section |
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49 |
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Payment of Tax, Interest, |
5. The amount of input tax credit available in the electronic |
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Pe n a l t y a n d o t h e r |
credit ledger of registered person on account of – |
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amounts |
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a) IT shall first be utilised towards payment of IT and |
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amount remaining, if any, may be utilised towards the |
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payment of CT and ST, or as the case may be, UT, in that |
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order |
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b) CT shall first be utilised towards payment of CT and the |
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amount remaining, if any, may be utilised towards |
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payment of IT |
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c) ST shall first be utilised towards payment of ST and |
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amount remaining, if any, may be utilised towards |
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payment of IT |
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d) CT shall not be utilised towards payment of ST or UT and |
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e) ST or UT shall not be utilised towards payment of CT. |
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Rule 36 – Documentary Requirements and Conditions: |
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Section |
Title |
Deals with |
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36 |
Documentary |
1. The input tax credit shall be availed by a registered person |
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Requirements and |
on basis of invoice/challan for RCM/Debit Note/BOE in case |
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Conditions for claiming |
of imports/ISD Invoice/ISD credit note. |
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ITC |
2. ITC shall be availed by a registered person only if all |
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applicable particulars as specified in Chapter VI are |
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contained in said doc, and relevant information, as |
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contained in said doc, is furnished in GSTR-2 by such |
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person. |
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3. No Input tax credit shall be availed by a registered person in |
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respect of any tax that has been paid in pursuance of any |
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order where any demand has been confirmed on account |
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of fraud, willlful misstatement or suppression of facts. |
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Rule 37 – Reversal of ITC:
Section |
Title |
Deals with |
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37 |
Reversal of ITC in case of |
1. A registered person who has availed ITC but fails to pay to |
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n o n - p a y m e n t o f |
the supplier, the value of supply along with tax payable, |
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consideration |
within 180 days, shall furnish the details of such supply, |
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amount of value not paid and amount of ITC availed of |
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proportionate to such amount not paid to supplier in GSTR- |
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2 for the month immediately following period of 180 days. |
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Provided that the value of supplies made without |
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consideration as specified in Schedule I shall be deemed to |
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have been paid for purposes of second proviso to Section |
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16(2). |
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2. The amount of ITC specified above, shall be added to output |
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tax liability of registered person for month in which details |
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are furnished. |
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3. The registered person shall be liable to pay interest in terms |
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of Section 50(1) for period starting from date of availing |
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credit on such supplies till the date when the amount added |
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to the output tax liability, as mentioned in sub-rule (2). |
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4. The time limit specified in Section 16(4) shall not apply to a |
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claim for re-availing of any credit, in accordance with |
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provisions of this act or provisions of this chapter, that has |
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been reversed earlier. |
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Rule 42 – Manner of Distribution – Input/Input Services: |
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Section |
Title |
Deals with |
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- Manner of distribution The manner for determining reversal of credit as specified in of ITC in respect of input Section 17(1) and 17(2) is as under:
or input services |
and |
reversal thereof |
Total Credit: |
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?TotalITCinvolved on inputs and input services in a tax period = T |
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Eliminate Exclusive Credits for Exempted & Ineligible Credits: |
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?ITCexclusively used for purposes other than business = T1 |
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?ITCexclusively used for purposes of exempted supplies = T2 |
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?AmountofITC on which credit is not allowed as per 17(5) = T3 |
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?AmountofITC credited to credit ledger = C1 = T – (T1 + T2 + T3) |
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Identify Exclusive Credits for Taxable Supplies: |
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?ITCexclusively used for taxable supplies = T4 |
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Arrive at Common Credits: |
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?CommonCredits = C2 = C1 – T4 |
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Arrive at Common Credits pertaining to Exempt Supplies: |
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?Amountof common ITC towards exempt supplies = D1 = E/F * |
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C2 |
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E = Aggregate value of exempt supplies during tax period |
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F = Total turnover in the state of registered person during tax |
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period |
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Arrive at Common Credits pertaining to Other than business |
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purposes: |
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?Amountof common ITC towards non-business = D2 = 5% * C2 |
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Identify Common Credits for business purposes and Taxable |
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Supplies: |
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?Amountof common ITC for taxable and business purposes = |
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C3 = C2 – (D1+D2) |
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Adding D1 & D2 to output tax liability for the tax period: |
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?D1andD2 shall be added to output tax liability and to be |
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checked with final turnovers. |
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Section |
Title |
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Deals with |
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42 |
Manner |
of distribution |
The ITC determined under sub-rule (1) shall be calculated finally |
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of ITC in respect of input for financial year before the due date of furnishing of return for |
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or input |
services and |
month of September following the end of financial year to which |
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reversal thereof |
such credit relates, in manner specified as under: |
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?Ifthefinal D1 and D2 are greater than provisional D1 and D2, |
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then such excess D1 and D2 shall be added to output tax |
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liability in month not later than month of September |
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following the end of financial year to which such credit |
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relates and said person shall be liable to pay interest on said |
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amount in terms of Section 50(1) starting from first day of |
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April of succeeding financial year till date of payment |
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?Ifthefinal D1 and D2 are lesser than the provisional D1 and D2, such excess D1 and D2 shall be claimed as credit by registered person in his return for month not later than the month of September following end of FY to which such credit relates.
Total Credits |
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Credit on Inputs & Input Services |
T |
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15,00,00 |
Elimination of Ineligible & Exempt Credi |
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Exclusively used for Non-Business |
T1 |
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1,00,00 |
Exclusively used for Exempt |
T2 |
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3,00,00 |
Ineligible under Sec 17(5) |
T3 |
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75,00 |
Credit allowed in Ledger |
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ITC credited to ledger |
C1 |
T - (T1+T2+T3) |
10,25,00 |
Credit Exclusively used for Taxable Supp |
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Exclusively used |
T4 |
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3,25,00 |
Common Credits both for Taxable & Exempted |
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Common ITC |
C2 |
C1- T4 |
7,00,00 |
Common Credits for Exempted & Non-Business |
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Common ITC for Exempted |
D1 |
E/F * C2 |
1,86,66 |
Common ITC for Non-Business |
D2 |
5%*C2 |
35,00 |
Common Credits for Taxable |
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Common ITC for Taxable |
C3 |
C2-(D1+D2) |
4,78,33 |
Addition to Output Tax Liability |
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To be added to Output Tax |
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D1+D2 |
2,21,66 |
Net Credit Allowed for tax period |
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ITC allowed |
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C1-(D1+D2) |
8,03,33 |
Rule 43 – Manner of Distribution – Capital Goods: |
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Section |
Title |
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Deals with |
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43 |
Manner |
of distribution |
The manner for determining reversal of credit as specified in |
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of ITC in respect of |
Section 17(1) and 17(2) is as under: |
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Capital |
Goods and |
a) |
Credit of ITC in respect of CG used exclusively for non- |
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reversal thereof |
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business or exempted supplies shall not be taken in credit |
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ledger |
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b) Credit of ITC in respect of CG used exclusively for effecting |
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supplies shall be taken in credit ledger |
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c) Amount of ITC in respect of CG not covered above, demoted |
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as ‘A’, shall be credited to credit ledger and useful life of |
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goods shall be taken as 5 years from date of invoice for such |
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goods |
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d) |
The aggregate of amounts ‘A’ credited to ledger under |
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clause (c) to be denoted as Tc, shall be common credit in |
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respect of capital goods for a tax period |
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e) The amount of ITC attributable to a tax period on common |
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capital goods during their useful life, be denoted as Tm and |
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calculated as – Tm = Tc/60 |
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f) The amount of ITC, at the beginning of a tax period, on all |
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common capital goods whose useful remains during tax |
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period, be denoted as Tr and shall be aggregate of Tm for all |
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such capital goods |
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g) |
The amount of common credit attributable towards |
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exempted supplies, be denoted Te= (E/F) * Tr |
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E = Aggregate value of exempt supplies during tax period |
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F = Total turnover in the state of registered person during |
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tax period |
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h) The amount of Te along with applicable interest shall, |
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during every tax period of the useful life of concerned |
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capital goods, be added to output tax liability of person |
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making such claim of credit. |
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Rule 38 – Claim of Credit by Bank/FI/NBFC:
Section |
Title |
Deals with |
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38 |
Claim of Credit by a |
1. A banking company or a FI (including NBFC), engaged in |
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Banking Company or a |
supply of services by accepting deposits or extending loans |
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Financial Institution |
or advances that chooses not to comply with Section 17(2), |
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they can follow the procedure namely – |
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?saidcompany/institution shall not avail credit of – |
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?taxpaidon input and input services that are used for |
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non-business purposes |
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?creditattributable to supplies specified in 17(5) |
|
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?saidcompany or institution shall avail the credit of tax |
|
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paid on inputs and input services referred to in the |
|
|
second proviso to Section 17(4) and not covered under |
|
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17(5) or 17(1) |
|
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?50%ofremaining amount of input tax shall be input tax |
|
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credit admissible to the company or institution and shall |
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be furnished in GSTR-2. |
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Rule 44 – Manner of Reversal of Credit:
Section |
Title |
Deals with |
- Manner of Reversal of The amount of ITC relating to inputs held in stock, input Credit under Special contained in semi-finished and finished goods held in stock,
Circumstances |
and capital goods held in stock shall, for purposes of Section |
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18(4), be determined in the following manner, namely – |
- For inputs held in stock and inputs contained in semi-finished goods held in stock, the ITC shall be calculated proportionately on basis of corresponding invoice on which credit has been availed by registered taxable person on such inputs
- For Capital Goods held in stock, the ITC involved in remaining useful life in months shall be computed on pro-rata basis, taking useful life as 5 years.