ITC ON EXPENSES

Input tax credit in GST, As defined by section 2 (57) of the MGL (Model GST Law) and section 2 (1) (d) of the IGST Act, Input tax is related to a taxable entity which means the (IGST and CGST) in respect of CGST Act and (IGST and SGST) in respect of SGST Act is levied on every supply of goods or any services on the entity which is used by it or which is intended to to be consumed in the course of the business and subsumes the tax payable under sub-section (3) of section 7. In a simple way, input tax credit defines that an entity can reduce the taxes it paid on the inputs at the time of paying the taxes on output.

Some Common ITC FAQs After GST Implementation Q. Does the GST paid for motor vehicles used for office purpose is eligible for ITC? ITC is eligible for all the goods and services which are used within the business operations and course of furtherance, However, there are cases in which the ITC on goods and services has been restricted. And going by the laws the ITC is only permittable when the motor vehicle is acquired for resale or for transportation of passengers/ goods or for imparting training. Only aforementioned causes make eligible for the ITC else all the causes may be dismissed for the ITC

Q. Ready-made garments attracting 5% and polyester yarn at 18% GST. How much credit will be available?

Polyester Yarn will grant whole 18% tax credit

Q. Can a refund be claimed from the duty-free shop?

There is no provision for ITC in the exempt free shops

Q. A manufacturing company providing canteen services to the workers. WIll it provide input tax credit?

Section 17-5 of ITC does not provide input tax credit for such transactions

Q. When a taxpayer pays the reverse charge in cash, where it will be shown in input?

This will be shown in GSTR – 2 Q. Will credit be available for the imported stocks available until 30 June?

If all the documents are there of the stocks, then the credit can be claimed

Q. A raw material trader can get ITC for the transportation of goods?

The tax paid on transportation services can be availed for Input tax credit