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Credit Structure in GST

Today we will discuss the credit structure in GST. what are the taxes in the GST and how the credit will be available?

Also in this blog, we will discuss how current tax credit lying in stock can be taken in the GST.

Credit Structure in GST

There will be three tax in GST –  CGST, IGST and SGST

Credit of CGST can be taken and utilised against IGST

Credit of SGST can be taken and utilised against IGST

CGST credit cannot be taken and utilised against SGST.

Input tax credit in GST

There are Three type of input credit used in GST –

Inputs goods – Any goods other than capital goods used or intended to be used for making outward supply in the course or furtherance of business.

Capital goods – Capital goods covered in chapter 82,84 and 90 of excise act

Input services –  Any Service used or intended to be used for making outward supply in the course or furtherance of business.

Note – GST council has the power to exclude certain goods and service from input credit.

Ineligibility of Input tax credit in GST

ITC after expiry of 1 year

Input tax credit will not be available from the expiry of one year from the date of issue of tax invoice. this limit of 1 year will only on availing the credit there will be no limit on utilisation of credit.

Supply is used partly for business and partly for personal

Input tax credit will not be available to the extent supply used for the personal purpose.

Supply is used for Zero rated and Exempt

Input tax credit will not be available to the extent supply used for the Zero rated and Exempt

Service used for Consumption of employee

Input tax credit will not be available to the extent supply used for the Consumption of employee example – catering service in corporate.

Composition Levy

A person discharging tax liability under composition scheme can not transfer the credit.

Goods receive in instalment/lots against an invoice –

Input tax credit in GST will be available on the receipt of last lots.

Other Condition –

Need proper invoice

Goods should be received

Supplier has paid the GST  tax in cash or by utilisation of input credit

GST return has been filed.

Can we pay interest penalty and Fine Using ITC?

No, Interest penalty and Fine to be paid in cash under GST, Credit cannot be utilised for paying the same.

Carry forward of current Input tax credit of VAT/CST/ service tax and Excise

This is a very good scheme in GST for the dealer who is not registered in current law but taken registration in GST law.

Dealer Eligible credit Condition
Who was not liable for registration under earlier law – (May be due to not cross the threshold limit)

Engaged in manufacturing of exempt goods

Registered under composition schemes in earlier law

Input held in Stock (Raw material, finished  or semi-finished goods )on an appointed day

 

 

Intended to be used for making taxable supplies

Input tax credit not availed in earlier law

Not paying Composition tax in GST

Invoice pertaining to credit is not older than 12 months immediately preceding appointed day

 

About TAX BANIYA

I am passionate about my work , What ever it be . Life has its own way to express , stay positive and keep going . Life doesn't go the way you want, " Learn to adapt and modify". My mantra to be happy in life " Life has always been uncertain why worry ...forget the past , live your present focus it

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