Input Tax Credit under GST Regime
Shambhavi Sharma / 2021-05-04 12:08:31

Input credit refers to the ability to deduct the tax you've already charged on inputs while paying tax on production. In respect of GST, input tax credit refers to CGST, SGST / UTGST, or IGST which is paid on the supply of products or services, or both, of the person who is registered under GST in India. It contains the IGST levied on imports as well as the tax due under the reverse charge mechanism. If you are the holder of GST Registration for any business, then you'll be able to get the (ITC) for the tax which is paid by you while purchasing.
Conditions to claim Input Tax Credit under GST Regime
  • An individual who has a tax invoice (for a purchase) or a debit note from a licenced dealer.
  • The goods or services should have been received.
  • Tax paid on your sale by the government is deposited to the seller either by input credit claim or in cash.
  • GST returns have been filed by the supplier
As a result, in order for you to receive input credit on sales, all of your suppliers must also be GST compliant.
Eligible Personto Claim Input Tax Credit under GST Regime
For Regular Business
  • Under the composition system, all GST holders are allowed to claim an I-T-C (Input tax credit) with the exception of those who pay tax.
  • A person who is not registered under GST, but his annual turnover makes him liable to pay tax, must apply to obtain GST registration within 30 days for the input received in those products. Who is entitled to claim input tax credit held in stocks and semi-finished or finished products, He is responsible for paying tax from the date on which his annual turnover goes above the prescribed limit. This means that such purchases/Emption which are exempted/ immune are not deserving of ITC.
  • A voluntarily / indigenously registered person is eligible for a credit of tax which is kept in stock as well as inputs in semi-finished or finished products kept in stock immediately before the date of registration.
  • The person who stopped to pay tax under the composition scheme is entitled to the input tax which is found in the product (prepared for the final stage of manufacture) semi-finished, or full-fledged goods kept in stock, and the capital goods arrive immediately before the date on which the composition scheme Under this, it stops paying taxes.
  • When an exempt supply becomes taxable, the person can claim an input tax credit for inputs kept in stock, inputs in semi-finished or finished goods kept in stock, and from the day the exemption is supplied. Discount on first capital goods day. Supplies become taxable.
For Import Businesses
  • Importers should take advantage of the IGST and Compensation Cess ITCs. The ITC for basic customs duty (BCD) would, however, be unavailable.
  • An importer must report GSTIN in the Bill of Entry in order to claim IGST and Compensation Cess.
  •  For ITC validation, the EDI customer system will be linked to the GST portal.
If you need any further help regarding GST Registration Online, or GST Return Filing feel free to contact us 8766393412

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