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Input Tax Credit under GST Regime

Input Tax Credit under GST Regime 

One of the basic feature of GST the seamless flow of input Credit across the chain form the manufacturer to its ultimate customer .There are various setting laid down by law to avail GST Input Tax Credit on supply of goods or  services.

The following conditions need to be satisfied to avail input credit ability under GST Regime

  1. The dealers of goods or services should possess all invoices/debit or credit note. Supplementary invoices delivered by the supplier under GST Act.
  2. The goods should be received.
  3. Returned (GSTR 3)have been filed
  4. The tax charged have been paid by the government by the supplier.

Condition apply under Input Tax Credit under GST Regime 

Once Gstr has been filed by the supplier the recipient has the prominence of the purchase through auto populated form GSTR 2A the Input credit will be credited to the recipient’s electronic credit ledger on a provisional basis. The addition and alteration done by the recipient in Form GSTR-2 will be made available to supplier in Form GSTR- 1A for his acceptance.

Input credit will be available only when the Monthly returns (Form GSTR-3) are filed by the supplier along with payment tax. The final receipt of Input Tax credit will be corresponded through Form GST ITC-1.

Notes

GSTR-1: Furnish all outward supply details on or before 10th of the Subsequent month.

GSTR-2A: Auto-populated by System on 11th of subsequent month. This includes all inward supplies details

GSTR-3: Monthly Return auto-populated by the system on 20th of subsequent month

Key mechanisms  of GSTR-1 (Outward supplies by Tax payers)

This return form would catch the following information:

  • Basic elements of the Taxpayer i.e. Name along with GSTIN
  • Period to which the Return pertains
  • Gross Turnover of the Taxpayer in the previous Financial Year. This information would be submitted by the taxpayers only in the first year and will be auto-populated in subsequent years.
  • Final invoice-level supply information pertaining to the tax period separately for goods and services which has to be submitted as follows:
  • For all B2B supplies (whether inter-state or intra-state) invoice level specified details will be uploaded.
  • For all inter-state B2C supplies – invoice level details to be uploaded for invoices whose value is more than INR 2,50,000. For invoices below this value, state-wise summary of supply statement shall be filed.
  • Following parameters with respect to HSN code for goods and accounting codes for services will apply for submitting the information in return relating to invoice level information.
  • HSN code (4 digits) for goods and accounting code for services will be mandatory initially for all taxpayers with turnover in the preceding financial year above INR 5 crores.
  • HSN codes (8 digits) and accounting codes for services will be mandatory in case of exports and imports.
  • Details relating to advance received against a supply to be made in future will be submitted in accordance with the Point of Taxation Rules as framed in the GST law.
  • Details relating to taxes already paid on advance receipts for which invoices are issued in the current tax period will be submitted.
  • Separate table for submitting details of revision in relation to outward supply invoices pertaining to previous tax periods.
  • Separate table for effecting modifications/correcting errors in the returns submitted earlier.

Key components of GSTR-2 (Inward Supplies)

  • The information in GSTR 1 shall be auto-populated in concerned tables in GSTR-2. It can be modified by the taxpayer while filing GSTR-2.
  • The details of inwards supplies would be auto-populated in the Input Tax Credit (ITC) ledger on submission of return.
  • GST law should provide that ITC with respect to capital goods will be allowed over a period of 2 years in equal instalments. Further GST law should make appropriate provisions for availment of ITC in case of
  • nputs received in one lot or in multiple lots.
    Separate table for submitting details in relation to ITC received on an invoice on which partial credit has been availed earlier.
  • Separate table for ISD credit and TDS credit received by taxpayer.

Key components of GSTR-3

  • It would capture the aggregate level outward and inward supply information which will be auto populated through GSTR-1 and GSTR-2.
  • Information about ITC ledger, cash ledger and liability ledger would be updated in real time on an activity in connection with these ledgers by the taxpayer.
  • Details of payment of tax under various tax heads of CGST, SGST, IGST and Additional tax separately would be populated from the debit entry in credit/cash ledger. GST law may have provision for maintaining 4 head-wise account for CGST, SGST, IGST and Additional tax and at associated minor heads for interest, penalty, fee etc.
  • Taxpayer will have the option of claiming refund of excess payment through the return for which appropriate field will be provided in the return form.
  • Details of ITC balance (CGST, SGST and IGST) at the end of the tax period will be auto-populated in the ITC ledger irrespective of mode of filing return.
  • The return would have a field to enable the taxpayer to claim the refund or to carry forward the ITC balance (CGST, SGST and IGST). GST law may provide that the refund will be processed quarterly.
  • It will be auto-populated through GSTR- 1 (of suppliers), own GSTR-2, ISD return, TDS return of deductor, own ITC ledger, own cash ledger and own tax liability ledger.

See also : Registration under GST india

GST in Tally

What are benefits of GST 

The post Input Tax Credit under GST Regime appeared first on Best Tally Accounts Finance Taxation SAP FI Coaching Institute in dehradun.



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