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Session 01

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5 views8 pages

Session 01

Uploaded by

arunk0051
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Unit - 02

INPUT TAX CREDIT

VI sem B.com
Session 01
Contents :

• Input tax
• Input Tax Credit (ITC)
• ELIGIBILITY AND CONDITIONS FOR TAKING INPUT
TAX CREDIT (SECTION 16)
• INELIGIBLE INPUT TAX CREDIT[SECTION 17(5)]
• Documents for availing ITC
Input Tax Credit (ITC)

Input Tax Credit (ITC) is the core concept of GST as


GST is destination based tax. ITC avoids cascading
effect of taxes and ensures that tax is collected in the
State in which goods or services or both are
consumed.
Meaning of Input Tax Credit
Input tax means taxes paid on inward supply of
inputs, capital goods and services The taxes paid on
inputs are available for set off against the taxes
payable on outward taxable supply.
ELIGIBILITY AND CONDITIONS FOR TAKING INPUT TAX CREDIT (SECTION 16)

1. Only Registered person eligible to take ITC - Section 16(1)


2. He should be in possession of tax invoice or debit note or such other tax paying
documents as may be prescribed;
3. He should have received the goods or services or both
4. The supplier should have actually paid the tax charged in respect of the supply to
the government;
5. He should have furnished the return under section 39.
6. When goods are received in installments ITC can be claimed only when the last
lot is received
7. No ITC will be allowed if depreciation has been claimed on tax component of a
capital good
8. Where the goods against an invoice are received in lots or installments, the
register person shall be entitled to take credit upon receipt of the last lot or
installment.
9. The payment should have been made within 180 days from the date of issue of
invoice
INELIGIBLE INPUT TAX CREDIT[SECTION 17(5)]

1. Motor vehicles, except when they are supplied in the course of business
2. Membership of a club, health and fitness Centre.
3. Rent a cab, life insurance, health insurance, except where it is statutorily
obligatory for an employer to provide such services
4. Travel benefits extended to employees on vacation such as leave or
home travel concession.
5. Goods and services on which tax has been paid under composition
scheme
6. Tax paid after detection of fraud, willful misstatement or suppression
7. Tax paid for release of detained or seized goods
Documents for availing ITC

 Tax Invoice issued by the supplier


 Tax Invoice (self) – reverse charge
 Debit Note issued by the supplier
 Bill of Entry (Imports)
 Invoice or Credit Note issued by an ISD

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