Input tax credit - accounting courses in chandigarh

Input tax credit

1. Scenarios where you cannot Avail Input Tax Credit In the event that you have not enrollment inside 30 days from the date on which you wind up at risk to enlist, you will lose the qualified ITC on information sources and data sources contained in semi-completed or completed merchandise in stock, on the day preceding the date on which you end up subject to pay charge.

2. After as far as possible for benefiting Input Tax Credit is crossed ITC must be benefited inside the most punctual of the accompanying dates• 1 year of date of the receipt Or on the other hand • The date of filing of the return for September of the next financial year

Example: ABC is a dealer in men’s apparel. It purchases apparel for Rs.1,00,000 from the manufacturer on 15th July, 2017. GST paid on the purchase is Rs.18,000 (18%). They have filed their annual return for the year ‘17-’18 on 31st July 2018, and the return for September 2018 is filed on 20th October 2018.

Here, the three dates to be checked are-

1 year from date of invoice

14th July 2018

Date of filing of return for September of the next financial year

20th October 2018

Date of filing of annual return

31st July 2018

3. On goods and/or services used as inputs by a composition tax payer A composition taxpayer cannot avail ITC on goods and/or services used as inputs.

Example: Laxmi Kirana Stores is registered as a composition taxpayer under GST. It purchases grocery items from the manufacturer for Rs.20,000 and GST is charged @ 12% amounting to Rs.2,400. As Laxmi Kirana Stores is registered as a composition tax payer, it cannot avail ITC of Rs.2,400 on the purchase. This GST paid will become part of their material cost.

4. On goods and/or services used for personal consumption Example: Rajesh Apparel Pvt Ltd purchased apparel for Rs.50,000 from the manufacturer. GST paid on the purchase is Rs.9,000. Out of the apparel purchased, apparel worth Rs.2,000 is taken by the owner for his personal use. The remaining apparel are sold to customers. Here, the ITC to be availed on the purchase is Rs.8,640 (48,000 *18%).

5. On goods and/or services used for making exempt supplies ITC cannot be availed on goods and services used for making exempt supplies and items where the acceptor pays tax on reverse charge basis.

Example: You manufacture an exempt good. You purchase the following inputs (used to manufacture the exempt good) on 4th September 2017-

Inward supplies- 4.9.2017 Inputs

Value (Rs.)

GST paid on inputs @ 18% (Rs.)

Raw material A

3,00,000

54,000

Raw material B

30,000

5,400

Total

3,30,000

59,400

6. On services received for which payment has not been made within 3 months from the date of invoice If the recipient of a service has not made payment for the receipt of the service along with the tax payable within 3 months from the date of invoice, the ITC availed will be added to the recipient’s liability, along with interest due.

Example: You have taken auditing and consultancy services from a Chartered Accountant. The value of the service is Rs.50,000 and the GST charged is Rs.9,000 (@18%). If you do not make the payment of Rs.59,000 within 3 months of the invoice date, the ITC of Rs.9,000 availed by you will be added to your liability, along with the interest due. If you are searching best Accounting courses in chandigarh. CBitss technologies is best place to learn best Accounting Software training in Chandigarh

(+91) 9988741983 counselor.cbitss@gmail.com SCO 23-24-25, Sector 34A Chandigarh, IN 160022

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