Last updated on August 25th, 2017 at 12:36 pm Businesses having carry over Cenvat credit and Input VAT credit are allowed to carry forward the eligible Cenvat/Input Credit (ITC) from earlier regime to GST. The Cenvat credit including Service Tax will be carried forward as CGST Input Tax credit and VAT including entry tax will be available as SGST Input tax credit. And, also in certain businesses circumstances, input tax credit on closing stock held on 30th June, 2017, will be allowed to carry forward to GST regime. However, to be eligible to carry forward the credit, businesses are required to meet certain conditions. To know more about different business scenarios and conditions, read our blog Moving to GST: […]
Input tax credit is a critical component of compliance under GST. While input tax credit is available on all inputs used in the course of business or for furtherance of business, certain conditions have been laid down for claiming the input credit. Also, input tax credit is not allowed on certain inputs. This checklist is a useful ready reckoner for you to claim input tax credit correctly. Conditions for claiming input tax credit Negative list (Goods or services on which input tax credit cannot be claimed) ✔ The inputs should be used or intended to be used in the course of business or for furtherance of the business ✔ Motor vehicles or other conveyance, unless they have been further supplied […]
GST, a comprehensive indirect tax system, was introduced on 1st July, 2017. The businesses are in the transition phase, and doing everything possible to get equipped with new taxation reform. Among the various aspects, migrating of input tax credit (ITC) is an important one. The closing balance of ITC of CENVAT, VAT, Service Tax as on 30th June, 2017, will be allowed to carry forward as input tax credit to GST. CENVAT (Including Service Tax) will be carried forward as CGST input tax credit, and VAT will be carried forward as SGST input tax credit. While this sounds too simple for businesses, there are certain conditions and actions which businesses need to carry out to get the complete ITC without […]
Last updated on July 24th, 2017 at 02:18 pm GST, a comprehensive indirect tax system introduced on 1st July, 2017, is a transaction-based, technology-driven tax system. Under GST, compliance becomes a key factor for the success and credibility of businesses. GST compliance works on the concept of Self-Monitoring mechanism, under which the input tax credit will be dependent on your supplier’s compliance. This means, your supplier should file the returns, declaring the outward supplies along with the tax payment, and matching of invoice between supplier and recipient of goods and services. This is a major transformation from the earlier compliance process, in which the value of input credit availed by you is not dependent on your suppliers’ compliance. In our […]
GST (Goods and services tax) – India – Tally SolutionsImpact of GST on Traders On October 14th, 2016 the Confederation of All India Traders (CAIT) signed an MOU with Tally Solutions in order to train their member businesses – roughly 6 lakh traders all over the country, on the subject of GST. While the focus is largely to enable the trading community to appreciate and accept the importance of […] The post Impact of GST on Traders appeared first on GST (Goods and services tax) – India – Tally Solutions.
In our previous blog Understanding Input Service Distributor (ISD) in GST, we discussed the role of an ISD in GST. In this blog, we will discuss the various conditions applicable for the distribution of credit and method of distribution of credit to different units (branches). Conditions for distribution of input tax credit by an ISD The following are the conditions applicable for distribution of input credit by an ISD: 1. An ISD invoice clearly indicating ‘issued only for distribution of input tax credit’, should be issued by the distributor to the recipient of credit. The unit to which the input tax credit is distributed is referred as the ‘Recipient of credit’. The tax invoice should contain the following details; Name, […]
It is quite common that businesses have a distributed system of manufacturing units or service rendering units across the nation. In simple words, businesses with Head Offices (HO) and Branch Offices (BO) which are spread across the nation could be in the same state or a different state. Under this system, in order to have better operational efficiency and control, usually businesses adopt centralized billing for procurement of common services at the HO. This situation leads to the accumulation of input tax credit paid on common inward supplies which are used by the branch units. In order to avoid the aforesaid situation, the concept of Input Service Distributor (ISD) was introduced in CENVAT credit rules, which allows the HO to […]
In the current tax regime, various conditions are applicable for availing input tax credit. A brief overview is given below: Type of Input Tax Credit Conditions for availing Input Tax Credit (ITC) VAT As a VAT dealer, you can avail credit of the VAT paid on goods purchased in the course of business, for re-sale or for manufacture of goods, subject to conditions. Only purchases from registered dealers within the state are eligible for ITC CENVAT/Service Tax As a manufacturer, you can avail CENVAT credit on all inputs used directly or indirectly in relation to the manufacture of final products. You can also avail ITC on the service tax paid on any input service. If you are a service […]