Input Tax Credit (ITC) and its Conditions
The concept of Input Tax Credit (ITC) aims to prevent tax cascading effects. Registered individuals can avail ITC on eligible inputs like Capital Goods and Input Services. Specific conditions must be met for claiming ITC, including payment of taxes and timely filing of returns. However, depreciation claimed on GST may restrict ITC eligibility. Utilization of ITC involves managing liabilities like SGST, CGST, and IGST. Learn more about ITC eligibility and utilization to optimize tax benefits.
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Presentation Transcript
INPUT TAX CREDIT The basic concept of Input Tax Credit (ITC) is to avoid the cascading effect of tax.
WHO CAN TAKE INPUT TAX CREDIT? Every registered person is entitled to take input tax credit
WHICH INPUTS ARE ELIGIBLE FOR ITC? Inputs Capital Goods Input Services Used or intended to be used by the supplier in the course or furtherance of business.
CONDITIONS FOR TAKING INPUT TAX CREDIT The registered person will be entitled to ITC on a supply only if ALL the following conditions are satisfied: He has a tax invoice / debit note / other prescribed tax paying documents. He has received the goods and / or services. The tax charged in respect of such supply has been actually paid to the government. He has furnished the return under Section 39.
CONDITIONS FOR TAKING INPUT TAX CREDIT Additional Conditions: When goods are received in lots, ITC is availed only at the time of receipt of the last lot. The invoice value including the tax has been paid to the supplier within 180 days of the date of invoice.
ITC NOT ALLOWED IF DEPRECIATION IS CLAIMED ON GST When the registered person has claimed depreciation on the tax component of the cost of capital goods and plant and plant and machinery , ITC on the said component shall not be allowed. i.e. in respect of the tax paid on such items , dual benefit cannot be claimed both under Income Tax Act , 1961 and the GST laws.
TIME LIMIT FOR CLAIMING ITC The due date of filing of the return for the month of September of the succeeding financial year or The date of filing of the relevant annual return Whichever is earlier.
Utilization of Input Tax Credit SGST Input CGST Input IGST Input SGST Liability CGST Liability IGST Liability IGST Liability CGST Liability IGST Liability SGST Liability
