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INPUT TAX CREDIT

INPUT TAX CREDIT

• WHO CAN CLAIM CREDIT

• WHAT CAN BE CLAIMED

• CONDITIONS FOR CLAIMING THE CREDIT  

INPUT TAX CREDIT

INPUT TAX CREDIT

• NEGATIVE LIST

• ITC REVERSAL

• PENALTIES

WHO CAN CLAIM CREDIT ?

• Sec. 11(1)(a) Registered dealer Issues:

• Purchase before date of registration

• Permission under lump-scheme not valid

WHAT CAN BE CLAIMED ?

• Sec. 11 (1) (a)

• (i) VAT charged in the tax invoice

• (ii) Purchase tax under sub-section (1), (2), (5) or (6) of section 9, or;

• (iii)Tax paid by the purchasing dealer under the Gujarat Tax on Entry of Specified Goods into Local Areas Act, 2001. Issues:

• Actual payment of PT & ET not mandatory – Explanation to Rule 15(5)

• Impact of Sec. 11(7A) & Explanation to Sec. 11

CONDITIONS FOR CLAIM OF CREDIT

• Maintenance of books of accounts – Rule 15(1)

• Period when credit can be claimed – Rule 15(2)

• Condition on use – Sec. 11(3)(a)

• Tax Invoice – Sec. 11(4)

• Negative list – Sec. 11(5)

• Reversal – Sec. 11(3)(b)

NEGATIVE LIST (Sec. 11(5))

• (f)of the goods (not being taxable goods dispatched outside the State in the course of branch transfer or consignment) which are disposed of otherwise than in sale, resale or manufacture;

• (g)of the goods specified in the Schedule I or the goods exempt from whole of tax by a notification under sub-section (2) of section 5;

• (h)of the goods which are used in manufacture of goods specified in Schedule I, or the goods exempt from the whole of the tax by a notification under sub-section (2) of section 5 or in the packing of goods so manufactured;

• (i)of capital goods used in the manufacture of goods specified in Schedule I or the goods exempt from the whole of the tax by a notification under sub-section (2) of section 5 or in generation of electrical energy including captive power;

• (k)of the property or goods not connected with the business of the dealer;

INPUT TAX REVERSAL

• Sec. 11(3)(b) Reduction at the rate of four per cent on the taxable turnover of purchases within the State-

• (i) which are branch-transferred out-side the State

• (ii)used as raw materials in the manufacture, or in the packing of goods which are branch-transferred out-side the State.

• (iii)of fuels used for the manufacture of goods.

• Provided that where the rate of tax of the taxable goods consigned or dispatched by a dealer for branch transfer or to his agent outside that State is less than four percent, then the amount of tax credit in respect of such dealer shall be reduced by the amount of tax calculated at the rate of tax set out in the Schedule on such goods on the taxable turnover of purchases within the State.

PENALTY

• U/s 34(7)

• U/s 34(12) • Reliance Petroproducts (322 ITR 158) (SC)

• Savera tex (Second appeal no. 830 of 2014 & 831 of 2014)

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