Input tax credit under not allowed under GST

Goods and service used for his personal consumption by the owner.

Under such condition no Input Tax Credit is allowed to the business entity.

Example :

Purchase 10 nos to shoes for Rs 1000 each and  GST paid Rs 18% and one of the shoes is used by the owner for his personal used under such conditon no Input Tax credit is avaialbel for one shoes. As it is used by the owner for his personal consumption.

Input tax credit will not be available on goods which has exempted supplies.

ITC cannot be availed on goods and/or services used for making exempt supplies and supplies where the receiver pays tax on reverse charge basis.

Example A manufacturer of goods purchased goods costing R s 100000 and GST paid Rs 18000 which is exempted supplies hence it cannot claim input Tax Credit on exempted supplies.

Exempted supplies under GST

Exempt supply is defined in section 2(47) of GST Act. (47) “Exempt supply” means supply of any goods or services or both which attracts nil rate of tax or which may be wholly exempt from tax under section 11, or under section 6 of the Integrated Goods and Services Tax Act, and includes non-taxable supply. It thus includes the supply of following type of goods and services: (a) Non-taxable supply; (b) Supply attracting nil rate of tax; (c) Supplies exempt under Section 11 of the GST Act excluding IGST and under Section 6 of the IGST Act;

Read more at: http://www.caclubindia.com/articles/exempt-supply-under-gst-29663.asp

Registration not applied for within 30 days from the date on which you become liable to register

If you have not applied for registration within 30 days from the date on which you become liable to register, you will lose the eligible ITC on inputs and inputs contained in semi-finished or finished goods in stock, on the day before the date on which you become liable to pay tax.

After the time limit for availing Input Tax Credit is crossed

ITC must be availed within the earliest of the following dates-
• 1 year of date of the invoice
OR
• The date of filing of the return for September of the next financial year
OR
• The date of filing of the annual return (due date is 31st December of the next financial year)

Goods / service  purchased by Composite dealer  and pay their input

Composite dealer cannot avail the facility of Input pay on purchase of goods as he registered under composite scheme where his annual turnover is less than 75 lakhs and hence only has to some percentage of its total sale as his tax liability.

Example Mr X a composite dealer purchase goods costing Rs 100000 from Y and also paid 18% GST which comes Rs 18,000 now Mr X has to pay 118000 which he has to show on its purchase cost no seprate tax is shown.

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