Sales Tax officials are forcing business units to deposit tax on each return as according to them you are not allowed to claim full ITC even if you have sufficient amount of GST in your credit ledger.
They want the units to deposit some tax amount out of pocket as GST, and utilize only some portion of ITC.
Is there any official order for this?
4 Replies
sabyasachi mukherjee
(27574 Points)
Replied 11 May 2023
There is no such rule existing unless your operations force you.
Imthias ahamed Kormath
(910 Points)
Replied 11 May 2023
U selfly make a inverted tax structure, while ur ITC more than opt during respective return period.u paid an amount along with gstr 3b of respective return period.It will b a single tax liability from ur part on ur gross profit arises from outward taxable supply only .It is a business rule not like as ITR rule. ur profit arises from taxable and non taxable supplier or goods.
Pankaj Rawat
(GST Practitioner)
(55052 Points)
Replied 12 May 2023
Yes
As per Section 49(12) R/w Rule 86B :
registered persons cannot use ITC in excess of 99% of output tax liability. In simple words, more than 99% of the output tax liability cannot be discharged by using input tax credit where the taxable supply in month exceeds 50lac.
And Rule not Applicable (Exceptions) :
If the persons have paid more than Rs.1 lakh as Income Tax under Income Tax Act,
Registered person has received a refund of more then Rs.1 lakh in the preceding financial year on account of export under LUT or due to inverted tax structure.
Registered person has paid 1% tax in cash ledger out of total tax liability upto said month in Current fy.
As per Section 49(12) R/w Rule 86B :
registered persons cannot use ITC in excess of 99% of output tax liability. In simple words, more than 99% of the output tax liability cannot be discharged by using input tax credit where the taxable supply in month exceeds 50lac.
And Rule not Applicable (Exceptions) :
If the persons have paid more than Rs.1 lakh as Income Tax under Income Tax Act,
Registered person has received a refund of more then Rs.1 lakh in the preceding financial year on account of export under LUT or due to inverted tax structure.
Registered person has paid 1% tax in cash ledger out of total tax liability upto said month in Current fy.
sabyasachi mukherjee
(27574 Points)
Replied 12 May 2023
There is no point in highlighting this unless the operations force you. it means the ruling says you generate sales. pay off a part and then utilize in case you hv no sufficient credit.
Recent Topics
- NRO Interest - Taxed at source and in Foreign Coun
- Clarity needed on effective date
- Income Tax Refund Deadline Shortened to Five Years
- Rectification Applications for Past GST Demands
- Where can I find a trusted provider to hire a skip
- GST Invoices Series
- FILING OF ITR AY 20-21
- CLAIMING OF U CLAIMED RCM
- Building construction works
- REGARDING GSTR-9 F.Y 2023-24
Related Threads
CAclubindia
