C. U.
Shah University
Faculty Of Management Studies
A Presentation
On
Direct And Indirect Taxes
Project Guide : Mr. Deepak Sanghvi Sir
Name : Anjali D. Chhatbar
Enrollment No. : 16MS501001
Topic : Input Tax Credit (ITC) in GST
Sem. : MBA 4th (2016-18)
Flow of Presentation
Introduction
Input tax credit (ITC) in GST
How to Claim ITC under GST ?
How to avail Input Credit under GST ?
Under what situation one can not claim ITC ?
What are the documents & forms required to claim ITC ?
Introduction
Input credit means at the time of paying tax on output, you can reduce the
tax you have already paid on inputs.
• Tax paid on
OUTPUT A purchase of A
Rs. 100
Tax on output Rs. 450
• Tax paid on
B purchase of B
Rs. 120
• Tax paid on
C purchase of C
Rs. 80
Tax to be paid by manufacturer = Rs. 450 less tax paid on inputs (Rs. 100 + Rs. 120 + Rs. 80) = Rs. 150
Input Credit = Rs. 300
Input Credit in GST
Input credit mechanism is available to you when you are
covered under the GST Act.
How To Claim Input Credit Under GST ?
You must have a tax invoice (of purchase) or debit note issued by registered dealer
You should have received the goods/services
The tax charged on your purchases has been deposited/paid to the government by the supplier in
cash or via claiming input credit
Supplier has filled GST returns
Input tax credit allowed on capital goods.
Input credit is not allowed for goods and services for personal use.
How to Avail Input Credit
• Take Input Tax Credit from IGST & SGST paid on
To Pay IGST purchases
• Take Input Tax Credit from CGST & IGST paid on
To Pay CGST purchases
• Take Input Tax Credit from SGST & IGST paid on
To Pay SGST purchases
Cont…
Data goes from GSTR 2A
to GSTR 2 after buyer i.e.,
Mr. B accepts it.
• Mr. A sells goods to Mr. B • Amount for tax paid on
• Files GSTR 1 (details of • Mr. B files GSTR 2 purchases gets credited to
supply) Electronic Credit Register
Info. From GSTR 1 gets Mr. B can start using
reflected in GSTR 2A of credit against output tax
Mr. B liability or get refund.
Under what situation one can not claim
Input Tax Credit (ITC) ?
If goods and services are acquired for personal use.
In the case of goods and services acquisition on a contract which may result in a reduction of
immovable property apart from plant & machinery.
If one has paid tax in GST composition scheme for goods & services received.
In case an immovable property is built apart from plant & machinery using the goods & services
and this immovable property is not transferred.
In the case where employees have used the goods & services for personal purposes.
When the cost of capital goods depreciation is claimed, then Input Tax Credit cannot be claimed.
What are the documents & forms required
to claim Input Tax Credit ?
Supplier issued invoice for supplying the services & goods or both according to GST law.
A debit note issued by the supplier to the recipient in case of tax payable or taxable value as specific
in the invoice is less than the tax payable or taxable value on such supplies.
Bill of entry.
A credit note or invoice which is to be issued by the ISD (Input Service Distributor) according to
the GST invoice rules.
An invoice issued like the bill of supply under certain situations instead of the tax invoice. If the
amount is lesser than INR 200 or in condition where the reverse charges are applicable according to
the GST law.
A supplier issued a bill of supply for goods and services or both as per the GST invoice rules.
