GSTN: Availability of Input Tax Credit

Last Updated On: Oct. 18, 2021, 9:17 p.m.
...

GSTN: AVAILABILITY OF INPUT TAX CREDIT

 

What is Input Tax Credit?

 

When you buy a product/service from a registered dealer you pay taxes on the purchase. On selling, you collect the tax. You adjust the taxes paid at the time of purchase with the amount of output tax (tax on sales) and balance liability of tax (tax on sales minus tax on purchase) has to be paid to the government. This mechanism is called utilization of input tax credit.

 

Who can claim ITC?

ITC can be claimed by a person registered under GST only if he fulfils ALL the conditions as prescribed.

a. The dealer should be in possession of tax invoice

b. The said goods/services have been received

c. Returns have been filed.

d. The tax charged has been paid to the government by the supplier.

e. When goods are received in installments ITC can be claimed only when the last lot is received.

f. No ITC will be allowed if depreciation has been claimed on tax component of a capital good

 

 

 

AVAILABILITY OF INPUT TAX CREDIT:

The Goods and Service Tax Networks (GSTN) has issued the Advisory on availability of Input Tax Credit (ITC) for Financial Year 2020-21. As per Section 16(4) of CGST Act, 2017, no taxpayer shall take input tax credit in respect of records (invoices and debit notes) for supply of goods or services (or both) for Financial Year 2020-21 after the due date of furnishing the return for the month of September 2021.

The due date for the GSTR-3B for September 2021 is either 20th October 2021 for monthly filers and 22nd or 24th October 2021 depending on the State/UT of registration of the taxpayer.

 

“Records (invoice or debit notes) pertaining to Financial Year 2020-21 reported in GSTR-1 after the due date of GSTR-3B of September 2021 will not reflect as “ITC Available” in GSTR-2B of the recipients. Such records will reflect in “ITC Not Available” section of GSTR-2B and such ITC shall in turn not be auto-populated in GSTR-3B,” the GSTN said.

 

Further, records (invoice or debit notes) pertaining to Financial Year 2020-21 reported in GSTR-1 after the due date of GSTR-3B of September 2021 will also not reflect as “ITC as per GSTR-2A” in Table-8A of GSTR-9 of the recipients.

 

It is requested that the taxpayers may take note of the above and ensure that their records pertaining to Financial Year 2020-21 are reported on or before the due date of their GSTR-3B for the month September 2021, or for the quarter of July to September 2021 in case of quarterly GSTR-3B filers. Availment of ITC by the recipients contrary to the legal provisions in GST may entail action by the tax administrations in accordance with law,”
 

ABOUT LEGAL SUVIDHA

Copyright © 2013-2021 - All Right Reserved