Compliance Calendar for the Financial Year 2024-25
in GST enacted through the Finance (No. 2) Act, 2024
INPUT TAX CREDIT (ITC)
GST REGISTRATION & TYPES OF TAXPAYERS
COMPOSITION SCHEME UNDER GST (SECTION 10)
BILL
OFFENCES & PENALTIES
4 Input Tax Credit (ITC)
4.1 DEFINITIONS OF ITC (INPUT TAX CREDIT) & FEW TERMS USED IN THIS CHAPTER
Input Tax Credit:
by the Registered Supplier to any Registered Recipient.
a reverse charge basis by the registered recipient of supply on certain specified goods or services such as GTA, Advocate services etc.
b import of goods
For Example: -
Registered Supplier:
Registered Recipient:
4.2
4.2 ELIGIBILITY AND CONDITIONS FOR TAKING INPUT TAX
CREDIT (ITC) (SECTION 16 READ WITH RULES 36 & 37 OF CGST RULES)
Registered Recipient i.e. a g
Please Note that the any of the above-mentioned documents must contain at least all the following five particulars for availing the ITC: -
The amount of tax charged, Description of goods or services, Total value of supply, GST No. of the supplier and recipient, Place of supply in case of transaction happened between two different States.
aa This condition is effective from 1st January 2022:
For Example:
goods against an invoice are received in lots or instalments after receiving the last lot.
For example: `
ba This condition is effective from 1st October 2022:
c paid the GST charged from the registered recipient to the government
The Amendment effective from 1st October, 2022
e filed the requisite GST returns (Kindly refer GST returns chapter for the different types of returns)
f on the capital assets if the depreciation is claimed on the tax part also.
For example:
g composition scheme, cannot claim h which are used or intended to be used in relation to his business.
4.2.1 New restriction imposed on the availment of ITC with effect from 9-10-2019 (Rule 36(4) in CGST Rules, 2017)
Eligibility before 9-10-2019: eligible input
Eligibility from 9-10-2019 to 31-12-2019: eligible input
(Eligible ITC existing in 2A + 20% of the eligible ITC existing in 2A) = Provisional ITC maximum allowable in a tax period
Eligibility from 1-1-2020 to 31-12-2020: eligible input Para 4.2
91 Para 4.2
(Eligible ITC existing in 2A + 10% of the eligible ITC existing in 2A) = Provisional ITC maximum allowable in a tax period
Eligibility from 1-1-2021 to 31-12-2021:
Eligible Input:
Please note that the said condition shall apply cumulatively for the period February, March, April, May, June, July and August, 2020 and the return in FORM GSTR-3B for the tax period September, 2020 shall be furnished with the cumulative adjustment of input tax credit for the said months in accordance with the condition above.
Some conditions of this new rule:(Exclusions) For Example: -
Eligible ITC as per books Eligible ITC reflected in 2A Permissible ITC (Eligible ITC in 2A + 20%) Actual ITC which can be claimed
Para 4.2
Case Balance
Eligible ITC as per books
Eligible ITC reflected in 2A (out of balance left)
Eligibility from 01-01-2022:
Permissible ITC (Eligible ITC in 2A + 20%)
4.2.2 Time limit or deadlines for availing ITC
Actual ITC which can be claimed
Due date of filing of GST Return (return in which ITC is availed i.e. GSTR-3B for regular taxpayers) for the month of September following the end of financial year
Actual Date of furnishing of GST annual return (i.e. GSTR-9) Whichever is earlier………
For Example: - ` a.20th Oct 2019
(GSTR-3B)
Para 4.2
b. 11th Nov 2019.
Hence, in this case the last date of taking GST input of FY 2018-19 would be 20th Oct 2019. (Earlier of 20th Oct 2019 & 11th Nov 2019)
The most important amendment in the deadlines to avail the ITC (Effective from 1st October, 2022)
30th November following the end of financial year or
Actual Date of furnishing of GST annual return (i.e. GSTR-9)
Whichever is earlier………
NOTE NO. 1 i ii
(However with effect from 01/01/2021, the date of the debit note)
Point to be noted
“Please note that via special order, Govt. has extended the last date to avail ITC for the FY 2017-18 to 20th March 2019 instead of 20th Oct 2018.”
Amendments effective from 1st January, 2021
Relaxation notified by the Government during pandemic of COVID-19, for the deadlines already prescribed earlier in the Act & rules in relation to the GST compliances
20th March 2020 to 30th August 2020
shall be extended up to 31st August 2020.
Relaxation for the second wave of COVID-19 pandemic
April 2021 to 30th May 2021
15th
shall be extended up to 31st May 2021.
4.2.3 Restriction on the availment of ITC if the payment of invoice is not made within 180 days by the registered recipient (Rule 37 of CGST Rules)
[whether wholly or partly w.e.f. 01st October, 2022]
[or reverse w.e.f. 01st October, 2022]
[proportionate to the Invoice amount not paid to the supplier w.e.f. 01st October, 2022] -
*Here reverse charge inward supplies are not included in goods or services. It means that the condition of 180 days is not applicable in case of inward supplies on which RCM is applicable. Para 4.2
For Example: -
Points to be noted
Interest shall be calculated @ 18% p.a. as per section 50 of the CGST Act, 2017.
Please note that the ITC reversed on account of above-mentioned case can be re-claimed once the payment of the invoice is made to the supplier. In this case the time limit as specified in para No. 4.2.2 will not be applicable.
“It means that the re-claim of ITC on payment of invoice value to the limit allowed.”
In the above example, if A Ltd. made the payment of ` 1,18,000 (Invoice Value) to B ltd on 25th Nov 2019, the ITC which was reversed earlier can be reclaimed in the GST return for the month of Nov 2019 ignoring the deadline to claim ITC i.e. 20th Oct 2019.
The value of supplies made without consideration as specified in Schedule I of the said Act shall be deemed to have been paid for the purpose of this section.
The value of supply on account of any amount that the supplier is liable to pay in relation to such supply but which has been paid by the recipient of the supply and not included in the price actually paid or payable for the supply, in such case also, the value of such supply shall be deemed to have been paid for this section.
95 Para 4.2
Para 4.3 96
Relaxation notified by the Government during pandemic of COVID-19, for the deadlines already prescribed earlier in the Act & rules in relation to the GST compliances
20th March 2020 to 30th August 2020
shall be extended up to 31st August 2020.
Relaxation for the second wave of COVID-19 pandemic
15th April 2021 to 30th May 2021
shall be extended up to 31st May 2021.
4.3 APPORTIONMENT, DETERMINATION & REVERSAL OF ITC AND BLOCKED CREDIT (SECTION 17 READ WITH RULES 38, 42 & 43 OF CGST RULES)
4.3.1 Determination & Reversal of Input Tax Credit in respect of inputs & input services (Rule 42 of CGST Rules)
4.3.1.1
4.3.1.2
4.3.1.3
4.3.1.4
4.3.1.5
4.3.1.6
Common ITC: -
4.3.1.1 Where the goods or services on which GST is charged, are used for the following purposes: - (1st Case)
ITC IS USED FOR BUSINESS PURPOSE ONLY
ITC IS USED FOR PERSONAL PURPOSE ONLY
ITC IS USED FOR BOTH THE PURPOSES
For Example:`
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