concept of Deemed Credit under GST
If assessee is in possession of invoice which separately shows excise duty charged, he can simply avail that full credit for the next 6 months according to sales from appointing date of GST
BUT.....
Persons who don't have excise duty visible in their invoices, will be eligible to take credit in the following manner:-
IF GOODS ARE SOLD LOCALLY :-
For Goods taxable at 18% or above :- Credit shall be allowed at the rate of 60% of CGST payable on that goods - so if the rate is 18% then credit will be available available @ 5.4% (60% of 9% CGST)
For goods other than above :- Credit shall be allowed at the rate of 40% of CGST payable on that goods - so if the rate is 12% then credit will be available @ 2.4% (40% of 6% CGST).
IF GOODS ARE SOLD INTER-STATE
For Goods taxable at 18% or above -
Credit can be claimed @ 30% of effective IGST rate
eg: goods are sold @ 18% , credit will be @ 5.4% of IGST
For goods other than above
Credit can be claimed @ 20% of effective IGST Rate
eg : goods sold at 12%
credit is 12 x 20% = 2.4%
** Credit in the above deemed credit scheme will be available only once the said goods are sold and GST is paid. It's like a cash back scheme.
** To take the credit in this scheme following conditions will have to be fulfilled:-
Such goods were not unconditionally exempt from excise.The document for procurement of such goods is available.The stock of goods on which the credit is availed is so stored that it can be easily identified by the registered person.
** Deemed Credit scheme will go on for 6 months from GST Date, so stocks lying as on 30th June have to be sold maximum upto 31st December 2017.
** No Credit will be available if these goods are sold after December 2017
FOR GOODS WHICH ARE TAXED AT THE INITIAL STAGE OF SALE IN A STATE AND NO TAX HAS BEEN LEVIED LATER (STATE VAT)
AND INVOICE DOESN'T SHOW ANY STATE VAT
in such cases, assessee can avail such vat in following manner
IF THOSE GOODS ARE SOLD LOCALLY :-
For Goods taxable at 18% or above
Credit on such goods can be taken @ 60% on SGST
eg : goods sold @ 18%, credit available for SGST @ 5.4%
(9% x 60%)
For goods other than above
Credit on such goods sold locally can be claimed @ 40% on SGST
eg : goods of 12%
input SGST credit is 2.40%
(6% x 40%)
IF THOSE GOODS ARE SOLD INTER-STATE
For Goods taxable at 18% or above
Credit @ 30% of IGST
Eg : If goods sold are 18%, IGST Credit is 5.40% (18% x 30%)
For goods other than above
Credit @ 20% of IGST
eg : goods taxed at 12%
IGST Credit is 2.40% (12% x 20%)
** Credit in the above deemed credit scheme will be available only once the said goods are sold and GST is paid. It's like a cash back scheme.
** To take the credit in this scheme following conditions will have to be fulfilled:-
Such goods were not unconditionally exempt from STATE VAT.The document for procurement of such goods is available.The stock of goods on which the credit is availed is so stored that it can be easily identified by the registered person.
** Deemed Credit scheme will go on for 6 months from GST Date, so stocks lying as on 30th June have to be sold maximum upto 31st December 2017.
** No Credit will be available if these goods are sold after December 2017
thanks for the nice explanation !
CAclubindia
