It is always very calculative to register GST as there are many benefits, one of which is the input tax credit. This input tax is a very essential factor for registered taxpayers. However, there is a time limit with the due date mentioned for filing the GST for every succeeding financial year. The due date is in September of every financial year. The following article enumerates on how input tax credit can be used under claim and calculation.
Every person who has done GST Registration can avail input tax credit
Conditions for availing input tax credit by a registered taxpayer
1. The taxpayer should possess a valid tax invoice or debit note issued by the supplier
2. The taxpayer should have received the Goods / Services or both
3. The supplier should have paid GST to the Government
4. The supplier should have filed GST Returns
5 . The taxpayer should pay the supplier within 180 days from the date of issue of the invoice
Time Limit for availing Input Tax Credit
Input tax credit pertaining to a financial year should be availed within the due date of Filing GST Returns for the month of September of the succeeding Financial Year or the date of filing the annual return, whichever is earlier
Blocked credits
Input Tax Credit is not available in respect of the following Goods / Services
1. Motor vehicles for transportation of persons with seating capacity of less than or equal to 13 persons except when they are used for further supply of such vehicles or conveyances, making a taxable supply of transportation of passengers Imparting training on driving such motor vehicles.
2. Vessels and aircraft, except when they are used for further supply of such vessels or aircraft, making a taxable supply of transportation of passengers Imparting training on navigating/flying such vessels/aircraft Transportation of goods
3. General insurance, servicing, repair and maintenance relating to Motor vehicles, vessels and aircraft on which ITC is not allowed
4. Foods and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, except where they are used for making an outward taxable supply of the same category of Goods / Services.
5. Membership of a club, health and fitness centre
6. Rent a cab, life insurance and health services except where Such services are to be mandatorily provided by an employer to an employee as per Government notification. They are used for providing an outward taxable supply of the same category of goods or services or both
7. Leave travel benefits extended to employees
8. Works contract services for construction of an immovable property except where it is an input service for further supply of works contract service
9. Goods or services or both received by a taxable person for construction of an immovable property, even if it is in the course/furtherance of business
10. Goods / Services procured from a composition taxpayer
11. Goods / Services received by a non-resident taxable person except on goods imported by him
12. Goods / Services used for personal consumption
13. ITC will not be available for any tax paid due to fraud cases. Fraud cases include fraud or wilful misstatements or, suppression of facts, or confiscation and seizure of goods.
Order of adjustment of ITC
- ITC of IGST should be first utilized towards payment of IGST
- The remaining ITC of IGST can be utilized towards payment of CGST and SGST/UTGST in any order
- ITC of CGST and SGST/UTGST can be utilized towards payment of IGST, CGST and SGST/UTGST only after the ITC of IGST has first been utilized fully
- ITC of CGST should be first utilized towards payment of CGST
- Remaining ITC of CGST can be utilized towards payment of IGST
- ITC of SGST should be first utilized towards payment of SGST
- Remaining ITC of SGST can be utilized towards payment of IGST
- CGST ITC balance cannot be utilized towards payment of SGST and vice versa
