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GST ITC PPT – Input Tax Credit under GST

GST ITC PPT – Input Tax Credit under GST

GST ITC PPT 

GST ITC PPT : Input Tax Credit (ITC) is the backbone of the GST regime. GST is nothing but a value added tax on goods
& services combined. It is these provisions of Input Tax Credit that make GST a value added tax i.e., collection of tax at all points after allowing credit for the inputs. The procedures and restrictions laid down in these provisions are important to make sure that
there is seamless flow of credit in the whole scheme of transition without any misuse.Thus, the clarity of rules of availment and utilization will have significant impact on making GST a taxpayer-friendly tax.

One of the biggest advantages expected from the implementation of GST Act is that it would remove cascading effect by facilitating seamless flow of credit. This would be given effect by providing for the availment of ITC to the purchasing dealer in respect of the GST paid by the supplying dealer and thus by removing the restrictions placed in the present Cenvat credit rules on availment of credit which lead to break in the credit chain and consequent cascading effect which further leads to increase in cost of goods and services.Thus linking of invoice to invoice would eliminate any ambit for revenue leakage.

ITC has been defined as credit of IGST/CGST/SGST charged on any supply of goods and or services used or intended to be used in the course or furtherance of business and includes the tax payable under revserse charge . Registered taxable person shall be eligible to avail ITC credited to the e-credit ledger subject to condition prescribed without restrictions of availment (such as 50% of capital goods).

GST ITC PPT 

2(54) Input

input” means any goods other than capital goods, subject to exceptions as may be provided under this Act or the rules made thereunder, used or intended to be usedby a supplier for making an outward supply in the course or furtherance of business
2(55) Input Service

input service” means any service, subject to exceptions as may be provided under this Act or the rules made thereunder, used or intended to be used by a supplier for making an outward supply in the course or furtherance of business
2(57) Input Tax
(57) “
input tax” in relation to a taxable person, means the {IGST and CGST}/{IGST and SGST} charged on any supply of goods and/or services to him which are used, or are intended to be used, in the course or furtherance of his business and includes the tax payable under sub-section (3) of section 7

Section – 2(56) – “input tax credit” means credit of ‘input tax’ as defined in sub-section (55)
Section – 2(55) – “input tax” in relation to a taxable person, means the IGST, including that on import of goods, CGST and SGST charged on any supply of goods or services to him and includes the tax payable under sub-section (3) of section 8,
but does not include the tax paid under section 9.

GST ITC PPT 

Input credit means at the time of paying tax on output, you can reduce the tax you have already paid on inputs.

Input Credit in GST

Input Credit Mechanism is available to you when you are covered under the GST Act.

Which means if you are a manufacturer, supplier, agent, e-commerce operator, aggregator or any of the persons mentioned here, registered under GST, You are eligible to claim INPUT CREDIT for tax paid by you on your PURCHASES.

 

GST ITC PPT 

Conditions for availing of ITC:

A registered person will be eligible to claim Input Tax Credit (ITC) on fulfillment of the following conditions:

  • Possession of a tax invoice or debit note or Taxpaying documents such as tax invoice, debit note etc.,
  • Goods / service should have been received/deemed to be received by the taxable person
  • Tax charged on the invoice and should have been paid to the credit of government.
  • Return should have been furnished by the tax payer.
  • Credit for goods against an invoice received in lots / installments can be availed only on last lot in installment.
  • The timelines for entitlement of credit against a particular invoice shall lapse on the expiry of one year from date of issue of invoice.
  • Goods delivered by supplier to other person on the direction of registered person against a document of transfer of title of goods.
  • Failure to the supplier towards supply of goods and/or services within 180 days from the date of invoice, ITC already claimed will be added to output tax liability and interest to paid on such tax involved. On payment to supplier, ITC will be again allowed to be claimed.
  • No ITC will be allowed if depreciation have been claimed on tax component of a capital good
  • If invoice or debit note is received after
  • the due date of filing return for September of next financial year 
  • or
  • filing annual return
  • whichever Is later
  • No ITC will be allowedCommon credit of ITC used commonly for

    • Effecting exempt and taxable supplies
    • Business and non-business activity

GST ITC PPT 

Items on which credit is not allowed

  1. Motor vehicles and conveyances except the below cases
  2. Such motor vehicles and conveyances are further supplied i.e. sold
  3. Transport of passengers
  4. used for imparting training on driving, flying, navigating such vehicle or conveyances
  5. Transportation of goods
  6. food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery

But if the goods and/or services are taken to deliver the same category of services or as a part of a composite supply, credit will be available

Example: Mr. Dev purchases cosmetic creams to supply it to a customer, then credit of ITC paid on purchases will be allowed.

7. Sale of membership in a club, health, fitness centre.

8. rent-a-cab, health insurance and life insurance except the following:

  1. Government makes it obligatory for employers to provide it to its employees
  2. goods and/or services are taken to deliver the same category of services or as a part of a composite supply, credit will be available

Example: Mr. Dev takes the service of rent-a-cab to supply to Mr. Manoj, a customer, then credit of ITC paid on purchases will be allowed.

9.travel benefits extended to employees on vacation such as leave or home travel concession.

10. Works contract service for construction of an immovable property (except plant & machinery or for providing further supply of works contract service)

11. Goods and/or services for construction of an immovable property whether to be used for personal or business use

12. Goods and/or services where tax have been paid under composition scheme

13. Goods and/or services used for personal use

14. Goods or services or both received by a non-resident taxable person except for any of the goods imported by him.

15. Goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples

16. ITC will not be available in the case of any tax paid due to non payment or short tax payment, excessive refund or ITC utilized or availed by the reason of fraud or willful misstatements or suppression of facts or confiscation and seizure of goods.

GST ITC PPT 

Ways for availing the payment of ITC by a registered person:
– Tax credit entitlement on stock held and contained in semi-finished and finished goods

  • On the day immediately preceding the date of registration in case person obtaining voluntarily registration
  • On the day immediately preceding the date from which the person becomes liable to pay tax, in case person applied for registration within 30 days from the date of liability to pay tax or in case person ceases to pay composition tax and becomes liable to pay tax. under normal provision
  • – Proportionate credit in case of goods/services used partially for business use and partially for non-business
    – Proportionate credit in case goods/services are used partly for effecting taxable supplies and zero rated supplies and partly for effecting nontaxable supplies and exempt suppliesTransfer of unutilized credit allowed in case of change in constitution of person due to sale, merger, de-merger, amalgamation or transfer of business with provision for transfer of liabilities.
    – Switch over from regular scheme to composite scheme by debiting cash ledger of amount equivalent to ITC on stock, semi-finished and finished goods.
    – ITC taken on capital goods when it is supplied should be paid after reduction of prescribed percentage points or tax on actual transactions value whichever is higher.

GST ITC PPT 

Ineligible credit:
The following are the ineligible input credits:

  • Motor vehicles used except when supplied in the usual course of business or for providing taxable service of transportation of passengers, goods and training/driving skills
  • Goods or services used mainly for the purpose of personal use or consumption of employees
  • Principal acquiring goods or services in works contract for construction of immovable property except plant & machinery.
  • Principal acquiring goods or services wherein the property is not transferred and are used in construction of immovable property except plant and machinery
  • Goods or services on which composition tax has been paid
  • Goods or services used for private or personal consumption
  • ITC is not eligible on invoice after filing of return for the month of September or filing of annual return for the said year whichever is earlier.

GST ITC PPT 

Check here to download GST ITC PPT – Input Tax Credit under GST Power Point Presentations :

Sl No. Power Point Presentations TopicDownload Link
1.GST ITC PPT – Input Tax Credit under GST 01 CHECK HERE
2.GST ITC PPT – Input Tax Credit under GST 02 CHECK HERE
3.GST ITC PPT – Input Tax Credit under GST 03 CHECK HERE
4.GST ITC PPT – Input Tax Credit under GST 04 CHECK HERE
5.GST ITC PPT – Input Tax Credit under GST 05 CHECK HERE
6.GST ITC PPT – Input Tax Credit under GST 06 CHECK HERE
7.GST ITC PPT – Input Tax Credit under GST 07 CHECK HERE

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