Can a GST registered person, entitled to take eligible input tax credit (ITC) even as on date for the year 2017-18 and 2018-19 ?

Prime concept under Goods and Service tax Act Start at the point of  ELIGIBLE TO TAKE INPUT TAX CREDIT. Entitled to take means rights ; whereas claim is demanding to the world. So, legally, entitled to take and claim are not one and the same, both are different legal grounds.

The modality for input tax credit under the Tamil Nadu Value Added Tax Act and The Goods and service tax Act is totally differed.  The Tamil Nadu Value Added Tax Act sub Section (11) of Section 19 read with sub section (3) of Section 3 compelled that   in case any registered dealer fails to claim input tax credit in respect of any transaction of taxable purchase in any month, he shall “ Make the Claim “ before end of the financial year or before ninety days from the date of purchase, whichever is later.

Whereas if we refer sub section (4) of Section 16 of the Goods and Service Tax Act, condition prescribed that  a registered person ‘shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the date of furnishing of the return under section 39 for the month of September following end of financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual returns, whichever is earlier.

If we travel into Goods and Service Tax Act and its Rule , if the intention on input tax credit is particular, then the words must be under stood as used with reference to in the minds of the legislature .

Under the Goods and Service Tax Act, the concept of input tax credit begins with the golden words “ Shall be eligible to take input tax credit in the return “[Section 41(1),18(1) (a) to (d), 19(2), 19(5), 18(3), 19(1), 19(4),] subject to conditions and restrictions as may be prescribed [ Section 16(1),16(3),10,18(2), 16(2) second and third proviso, 17(1),17(2),17(4), 17(5)and 171(1) ] and end with the conditional clause “ Shall not be eligible to take input tax credit”  [Sub section (4) of Section 16 ].

Eligibility of taking input tax credit clause begins in form GSTR-2 by GST Rule 60.

In addition with the above we must know the other legal words ‘input tax credit availed’ described  under section 35 and 39 . Input tax availed details to be recorded in the books  and the details of input tax availed shall be reported with furnishing details of  inward supplies under Section 39 in form GSTR-3B.

For wrongly taken input tax credit will attract punishment under clause ix, ix of subsection (1) Section 122.

Input tax claims were described under Section 42,43,51 and 52.

Input tax utilisation were described under Section 49(4) and 49(5).

Entitled to take Cenvat credit and duty in his Electronic credit ledger were explained under Section 140(1), 140(2),140(3), 140(8) and 140(9).

Further any person  who claims that he is eligible for input tax the burden of prove such claims lies on such person as described under Section 155 of the Central Goods and Service Tax Act.

Hence it is very clear that first of all a registered person under the GST Act, as self- assessment  basis, he himself to determine his eligible input tax details, there after it is his duty to take his eligibility input tax credit in his return. If we analysis section 39 of the CGST Act, insist to disclose details of the input tax credit availed  i.e. in form GSTR 3-B. If so in which return he has to choose to take his eligible ITC?.  If we refer Section 38 read with section 37 confirmed that any person entitled to take his eligible input tax credit he has to choose form GSTR-2 auto populated from GSTR 2-A.

Question number 1 is in which return we have to take our eligible input tax credit.  It’s a chain of action, entitled to take eligible ITC in the return, allowable ITC, claimed, availed, distributed, transfer and utilised etc. Entitled to claim in the return is the basic one, Claim is  on provisional basis, matching, mis-matching, communication to both supplier and receipt on the common GST portal, final acceptance of input tax claimed, mis matching input tax credit discrepancies not rectified result added to the output liability of the recipient  were individual step of action described under CGST Act.

when we referred Section 38 it disclose the important role of form GSTR-2 by click the button ‘accept’ means by self assessment basis the registered person himself take the eligible input tax credit in his return means in form GSTR-2. The form GSTR- 2 has been deferred.

Now the question arise, until  , the date of effect of form GSTR- has not been notified by the government, Can we entitled to take eligible credit as on date?

The following words and phrase  were used under the Goods and Service Tax and its Rules on account of input tax credit.

(1) Shall be entitled to take eligible input tax credit.

(2) Input tax Credit shall not entitled to take input tax credit.

(3) Re- claimed input tax credit

(4) Input tax – blocked credit

(5) Input tax credit transfer to other persons

(6) At the invoice level, the  Act does not allowed certain amount towards input tax credit , for example if we  claimed depreciation on the tax component of the cost of capital goods and plant and machinery under the provisions of the Income-tax Act, 1961, the input tax credit on the said tax component shall not be allowed.

(7) Input tax credit availed to be recorded in the books of account and disclose in the return.

(8) Input tax credit claim not matching supplier details, the GST common portal duty shall communicate to both the supplier and recipient.

(9) Action for Wrongly availed and utilised input tax credit,

(10) Claim for refund etc.,

So, to understand the concept of input tax credit under the Goods and Service Tax Act we need to refer the following:

Section 16(1) prescribed that ‘ Every registered person  shall, subject to such conditions and restrictions as may be prescribed  and in the manner specified in Section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used  or intended to be used in the course or furtherance of his business and the amount shall be credited to the electronic credit ledger of such person’.

Section 16(2)  prescribed certain Conditions to entitled to the credit of any input tax in respect of any supply of goods or services or both to him, 

Entttled to take Credit of Eligible input tax credit as Self Assessed in the return

Sec.41 read with Rule 59,60, 69 Form GSTR-2 with instruction  were provided by notification and Form GSTR GSTR 2-A also prescribed]

(Section 41)

(1) Every registered person shall, subject to such conditions and restrictions as may be prescribed, be ‘entitled to take the credit of eligible input tax’, as self-assessed, in his return and such amount shall be credited on a provisional basis to his electronic credit ledger.

Section 49(2)  to Section 49(9) prescribed the manner such as electronic cash ledger  for using amount  may be used for making payment towards tax, interest, penalty, fees etc., the Electronic credit ledger amount may be used for making any payment towards output tax under CGST Act or Integrated GST Act. Further disclosed utilisation of tax under each head, refund of unutilised ITC, maintaining Electronic credit ledger, discharging his tax and other dues in the prescribed order , burden of tax paid to government.

Section 38  ( Furnishing details of inward supplies).

(1) Every registered person, other than an Input Service Distributor or a non-resident taxable person or a person paying tax under the provisions of section 10 or section 51 or section 52, shall verify, validate, modify or delete, if required, the details relating to outward supplies and credit or debit notes communicated under sub-section (1) of section 37 to prepare the details of his inward supplies and credit or debit notes and may include therein, the details of inward supplies and credit or debit notes received by him in respect of such supplies that have not been declared by the supplier under sub-section (1) of section 37.

(2) Every registered person, other than an Input Service Distributor or a non-resident taxable person or a person paying tax under the provisions of section 10 or section 51 or section 52, shall furnish, electronically, the details of inward supplies of taxable goods or services or both, including inward supplies of goods or services or both on which the tax is payable on reverse charge basis under this Act and inward supplies of goods or services or both taxable under the Integrated Goods and Services Tax Act or on which integrated goods and services tax is payable under section 3 of the Customs Tariff Act, 1975, and credit or debit notes received in respect of such supplies during a tax period after the tenth day but on or before the fifteenth day of the month succeeding the tax period in such form and manner as may be prescribed:

We have to  study the following to understand the intention of legislature:

A) Entitled to take Credit of Eligible Input Tax Credit

B) Input Tax Credit when shall not be eligible to take

C) Input tax credit when shall be available and when shall not be available.

D) When Input tax Credit shall be allowed to Transfer.

E) Claim for refund on account of Zero Rate supply.

F) Specified person entitled to claim Refund in certain cases.

G) Circumstances under which input tax credit not allowed.

H) Apportionment of credit

I) Entitled to take” the CENVAT Credit/ duty in his Electronic Credit Ledger.

J) Allowed” to take the CENVAT Credit/ duty in his Electronic Credit Ledger.

K) Input tax credit Availed to be recorded in the books of account and in the return

L) Furnishing of Return under Section 39 disclosing with input tax credit availed

M) Claimed Input tax Credit’Matching, reversal and reclaim of input tax credit, interest attract from the date of ‘availing input tax credit’- circumstances

N) When a registered person wrongly availed or utilised input tax credit can invite officer to initiate action under Section 73 or 74

O) input tax credit ‘takes or utilise or distribute’ -Penalty for offences

P) Wrongful availment or Utilisation’ of input tax credit or fraudently avails of input tax credit – Punishment for certain offences

Section 41 :- emphasis that  subject to such conditions and restrictions as may be prescribed, be ‘entitled to take the credit of eligible input tax’, as self-assessed, in his return and such amount shall be credited on a provisional basis to his electronic credit ledger.

Section 38 (1) and 38(2) :-the manner of Furnishing of details of inward supplies and the corresponding form GSTR-1, GSTR-2A,  form GSTR2 and form GSTR 1-A were prescribed.

Rule 60.  Form and manner of furnishing details of inward supplies prescribed.

 Form GSTR-2 format and Instructions to form GSTR-2 has  prescribed by notification for declaring/ taking  eligible ITC at the invoice level.

Section 49 (2): This section disclosed that the input tax credit as self-assessed in the return of a registered person shall be credited to his electronic credit ledger, in accordance with section 41 .

Eligibility and conditions for taking input tax credit read with Section 41 is prescribed. 

Head Section Rule
  Section 16(1) Every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49, be entitled to take credit of input tax “charged” on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person. Rule 36
  Section 16(2) Notwithstanding anything contained in this section, no registered person shall be entitled to the credit of any input tax in respect of any supply of goods or services or both to him unless,––

(a) he is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying documents as may be prescribed;

(b) he has received the goods or services or both.

Explanation.—For the purposes of this clause, it shall be deemed that the registered person has received the goods where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise;

(c) subject to the provisions of section 41, the tax charged in respect of such supply has been actually paid to the Government, either in cash or through utilisation of input tax credit admissible in respect of the said supply; and

(d) he has furnished the return under section 39:

Provided that where the goods against an invoice are received in lots or instalments, the registered person shall be entitled to take credit upon receipt of the last lot or instalment:

 
   

 Entitled to take credit of Input tax in special circumstances   :

Head Section Rule
  Section 18 (1) Subject to such conditions and restrictions as may be prescribed—

(a) a person who has applied for registration under this Act within thirty days from the date on which he becomes liable to registration and has been granted such registration shall be entitled to take credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the day immediately preceding the date from which he becomes liable to pay tax under the

provisions of this Act;

(b) a person who takes registration under sub-section (3) of section 25 shall be entitled to take credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the day immediately preceding the date of grant of registration;

(c) where any registered person ceases to pay tax under section 10, he shall be entitled to take credit of input tax in respect of inputs held in stock, inputs contained in semi-finished or finished goods held in stock and on capital goods on the day immediately preceding the date from which he becomes liable to pay tax under section 9:

Provided that the credit on capital goods shall be reduced by such percentage points as may be prescribed;

(d) where an exempt supply of goods or services or both by a registered person becomes a taxable supply, such person shall be entitled to take credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock relatable to such exempt supply and on capital goods exclusively used for such exempt supply on the day immediately preceding the date from which such supply becomes taxable:

Provided that the credit on capital goods shall be reduced by such percentage points as may be prescribed.

Rule 40

And

Commissioner Circular 96/15/2019 dt 28.03.2019.

Taking input tax credit in respect of inputs and capital goods sent for job work.

Head Section Rule
  Section 19(1) Notwithstanding anything contained in clause (b) of sub-section (2) of section 16, the principal shall be entitled to take credit of input tax on inputs even if the inputs are directly sent to a job worker for job work without being first brought to his place of business  
  Section 19(5) Notwithstanding anything contained in clause (b) of sub-section (2) of section 16,the principal shall be entitled to take credit of input tax on capital goods even if the capital goods are directly sent to a job worker for job work without being first brought to his place  

Entitled to avail the reclaimed input tax credit 

Head Section Rule
  Section 16(2) Second proviso: Provided further that where a recipient fails to pay to the supplier of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, the amount towards the value of supply along with tax payable thereon within a period of one hundred and eighty days from the date of issue of invoice by the supplier, an amount equal to the input tax credit availed by the recipient shall be added to his output tax liability, along with interest thereon, in such manner as may be prescribed:

Third proviso: Provided also that the recipient shall be “entitled to avail of the credit of input tax” on payment made by him of the amount towards the value of supply of goods or services or both along with tax payable thereon.

Rule 36,37 and 69

INPUT TAX CREDIT SHALL NOT BE AVAILABLE- BLOCKED CREDIT

Head Section Rule
Section 17 (5) Notwithstanding anything contained in sub-section (1) of section 16 and subsection (1) of section 18, input tax credit shall not be available in respect of the following, namely:

(a) motor vehicles and other conveyances except when they are used––

(i) for making the following taxable supplies, namely:—

(A) further supply of such vehicles or conveyances ; or

(B) transportation of passengers; or

(C) imparting training on driving, flying, navigating such vehicles or conveyances;

(ii) for transportation of goods;

(b) the following supply of goods or services or both—

(i) food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery except where an inward supply of goods or services or both of a particular category is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply;

(ii) membership of a club, health and fitness centre;

(iii) rent-a-cab, life insurance and health insurance except where––

(A) the Government notifies the services which are obligatory for an employer to provide to its employees under any law for the time being in force; or

(B) such inward supply of goods or services or both of a particular category is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as part of a taxable composite or mixed supply; and

(iv) travel benefits extended to employees on vacation such as leave or home travel concession;

(c) works contract services when supplied for construction of an immovable

property (other than plant and machinery) except where it is an input service for further supply of works contract service;

(d) goods or services or both received by a taxable person for construction of an immovable property (other than plant or machinery) on his own account including

when such goods or services or both are used in the course or furtherance of business.

Explanation.––For the purposes of clauses (c) and (d), the expression

“construction” includes re-construction, renovation, additions or alterations or repairs, to the extent of capitalisation, to the said immovable property;

(e) goods or services or both on which tax has been paid under section 10;

(f) goods or services or both received by a non-resident taxable person except on goods imported by him;

(g) goods or services or both used for personal consumption;

(h) goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples; and

(i) any tax paid in accordance with the provisions of sections 74, 129 and 130.

Rule 59. Form and manner of furnishing details of outward supplies.-

(1) Every registered person, other than a person referred to in section 14 of the Integrated Goods and Services Tax Act, 2017, required to furnish the details of outward supplies of goods or services or both under section 37, shall furnish such details in FORM GSTR-1 electronically through the common portal, either directly or through a Facilitation Centre notified by the Commissioner.

(2) The details of outward supplies of goods or services or both furnished in FORM GSTR-1 shall include the–

(a) invoice wise details of all –

(i) inter-State and intra-State supplies made to the registered persons; and

(ii) inter-State supplies with invoice value more than two and a half lakh rupees made to the unregistered persons;

(b) consolidated details of all –

(i) intra-State supplies made to unregistered persons for each rate of tax; and

(ii) State wise inter-State supplies with invoice value upto two and a half lakh rupees made to unregistered persons for each rate of tax;

(c) debit and credit notes, if any, issued during the month for invoices issued previously.

(3) The details of outward supplies furnished by the supplier shall be made available electronically to the concerned registered persons (recipients) in Part A of FORM GSTR-2A, in FORM GSTR-4A and in FORM GSTR-6A through the common portal after the due date of filing of FORM GSTR-1.

(4) The details of inward supplies added, corrected or deleted by the recipient in his FORM GSTR-2 under section 38 or FORM GSTR-4 or FORM GSTR-6 under section 39 shall be made available to the supplier electronically in FORM GSTR-1A through the common portal and such supplier may either accept or reject the modifications made by the recipient and FORM GSTR-1 furnished earlier by the supplier shall stand amended to the extent of modifications accepted by him.

Rule 60.  Form and manner of furnishing details of inward supplies.-

(1) Every registered person, other than a person referred to in section 14 of the Integrated Goods and Services Tax Act, 2017, required to furnish the details of inward supplies of goods or services or both received during a tax period under sub-section (2) of section 38 shall, on the basis of details contained in Part A, Part B and Part C of FORM GSTR-2A, prepare such details as specified in sub-section (1) of the said section and furnish the same in FORM GSTR-2 electronically through the common portal, either directly or from a Facilitation Centre notified by the Commissioner, after including therein details of such other inward supplies, if any, required to be furnished under sub-section (2) of section 38.

(2) Every registered person shall furnish the details, if any, required under sub-section (5) of section 38 electronically in FORM GSTR-2.

(3) The registered person shall specify the inward supplies in respect of which he is not eligible, either fully or partially, for input tax credit in FORM GSTR-2 where such eligibility can be determined at the invoice level.

(4) The registered person shall declare the quantum of ineligible input tax credit on inward supplies which is relatable to non-taxable supplies or for purposes other than business and cannot be determined at the invoice level in FORM GSTR-2.

(4A) The details of invoices furnished by an non-resident taxable person in his return in FORM GSTR-5 under rule 63 shall be made available to the recipient of credit in Part A of FORM GSTR 2A electronically through the common portal and the said recipient may include the same in FORM GSTR-2.

(5) The details of invoices furnished by an Input Service Distributor in his return in FORM GSTR-6 under rule 65 shall be made available to the recipient of credit in Part B of FORM GSTR 2A electronically through the common portal and the said recipient may include the same in FORM GSTR-2.

(6) The details of tax deducted at source furnished by the deductor under sub-section (3) of section 39 in FORM GSTR-7 shall be made available to the deductee in Part C of FORM GSTR-2A electronically through the common portal and the said deductee may include the same in FORM GSTR-2.

(7) The details of tax collected at source furnished by an e-commerce operator under section 52 in FORM GSTR-8 shall be made available to the concerned person in Part C of FORM GSTR 2A electronically through the common portal and such person may include the same in FORM GSTR-2.

(8) The details of inward supplies of goods or services or both furnished in FORM GSTR-2 shall include the-

(a) invoice wise details of all inter-State and intra-State supplies received   from registered persons or unregistered persons;

(b) import of goods and services made; and

(c) debit and credit notes, if any, received from supplier.

Form GSTR 2 ( Notified vide notification No. 3/2017- Central Tax ( Dated 19th June 2017) and further as amended by Notification No. 7/2017 – Central Tax ( Dated 27th June 2017), Notification No. 10 /2017 – Central Tax ( Dated 28th June 2017 )and Notification No.15/2017- Central Tax ( Dated 1st July 2017).

Download Form GSTR-2

Instructions

1. Terms used:

a. GSTIN: Goods and Services Tax Identification Number

b. UIN: Unique Identity Number

c. UQC: Unit Quantity Code

d. HSN: Harmonized System of Nomenclature

e. POS: Place of Supply (Respective State)

f. B to B: From one registered person to another registered person

g. B to C: From registered person to unregistered person

2. Table 3 & 4 to capture information of:

(i) Invoice-level inward supply information, rate-wise, pertaining to the tax period reported by supplier in GSTR-1 to be made available in GSTR-2 based on auto-populated details received in GSTR-2A;

(ii) Table 3 to capture inward supplies other than those attracting reverse charge and Table 4 to capture inward supplies attracting reverse charge;

(iii) The recipient taxpayer has the following option to act on the auto populated information:

a. Accept,

b. Reject,

c. Modify (if information provided by supplier is incorrect), or

d. Keep the transaction pending for action (if goods or services have not been received)

(iv) After taking the action, recipient taxpayer will have to mention whether he is eligible to avail credit or not and if he is eligible to avail credit, then the amount of eligible credit against the tax mentioned in the invoice needs to be filed;

(v) The recipient taxpayer can also add invoices (not uploaded by the counterparty supplier) if he is in possession of invoices and have received the goods or services;

(vi) Table 4A to be auto populated;

(vii) In case of invoices added by recipient tax payer, Place of Supply (PoS) to be captured always except in case of supplies received from registered person, where it is required only if the same is different from the location of the recipient;

(viii) Recipient will have the option to accept invoices auto populated as well as add invoices, pertaining to reverse charge only when the time of supply arises in terms of section 12 or 13 of the Act; and

(ix) Recipient tax payer is required to declare in Column No. 12 whether the inward supplies are inputs or input services or capital goods (including plant and machinery).

3. Details relating to import of Goods/Capital Goods from outside India as well as supplied by an SEZ Unit to be reported rate-wise by recipient tax payer in Table 5.

4. Recipient to provide for Bill of Entry information including six digits port code and seven digits bill of entry number.

5. Taxable Value in Table 5 means assessable value for customs purposes on which IGST is computed (IGST is levied on value plus specified customs duties). In case of imports, the GSTIN would be of recipient tax payer.

6. Table 6 to capture amendment of information, rate-wise, provided in earlier tax periods in Table 3, 4 and 5 as well as original/ amended information of debit or credit note. GSTIN not to be provided in case of export transactions.

7. Table 7 captures information on a gross value level.

8. An option similar to Table 3 is not available in case of Table 8 and the credit as distributed by ISD (whether eligible or ineligible) will be made available to the recipient unit and it will be required to re-determine the eligibility as well as the amount eligible as ITC.

9. TDS and TCS credit would be auto-populated in Table 9. Sales return and Net value columns are not applicable in case of tax deducted at source in Table 9.

10. The eligible credit from Table 3, Table 4 & Table 8 relating to inward supplies to be populated in the Electronic Credit Ledger on submission of its return in Form GSTR-3.

11. Recipient can claim less ITC on an invoice depending on its use i.e. whether for business purpose or non-business purpose.

12. Information of advance paid pertaining to reverse charge supplies and the tax paid on it including adjustments against invoices issued should be reported in Table 10.

13. Table 12 to capture additional liability due to mismatch as well as reduction in output liability due to rectification of mismatch on account of filing of GSTR-3 of the immediately preceding tax period.

14. Reporting criteria of HSN will be same as reported in GSTR-1.

Form GSTR 2 ( Notified vide notification No. 3/2017- Central Tax ( Dated 19th June 2017) and further as amended by Notification No. 7/2017 – Central Tax ( Dated 27th June 2017), Notification No. 10 /2017 – Central Tax ( Dated 28th June 2017 )and Notification No.15/2017- Central Tax ( Dated 1st July 2017).

FORM GSTR-2A

[See Rule 60(1) ]

Details of auto drafted supplies
(From GSTR 1, GSTR 5, GSTR-6, GSTR-7 and GSTR-8)

Year
Month

 –

1. GSTIN
2. (a) Legal name of the registered person
(b) Trade name, if any

 PART A

 3. Inward supplies received from a registered person other than the supplies attracting reverse charge

(Amount in Rs. for all Tables)

GSTIN

of supplier

Invoice details Rate Taxable value Amount of tax Place of supply (Name of State)
No. Date Value Integrated tax Central Tax State/ UT Tax Cess
1 2 3 4 5 6 7 8 9 10 11

 4. Inward supplies received from a registered person on which tax is to be paid on reverse charge

GSTIN of supplier Invoice details Rate Taxable value Amount of tax Place of supply (Name of State)
No. Date Value Integrated Tax Central Tax State/ UT Tax Cess
1 2 3 4 5 6 7 8 9 10 11

 5. Debit / Credit notes (including amendments thereof) received during current tax period

Details of original document
Revised details of document or details of original Debit / Credit note
Rate
Taxable value
Amount of tax
Place of supp-ly (Name of State)
GSTIN
No.
Date
GSTIN
No.
Date
Val-ue
Integr-ated
Tax
Centr-al Tax
State / UT Tax
Cess
1
2
3
4
5
6
7
8
9
10
11
12
13
14

PART B

6. ISD credit (including amendments thereof) received

GSTIN of ISD ISD document details ITC amount involved
No. Date Integrated Tax Central Tax State/ UT Tax Cess
1 2 3 4 5 6 7
ISD Invoice –eligible ITC
ISD Invoice –ineligible ITC
ISD Credit note –eligible ITC
ISD Credit note –ineligible ITC

 PART- C

7. TDS and TCS Credit (including amendments thereof) received

GSTIN of Deductor / GSTIN of e- Commerce Operator Amount received / Gross

Value

 

Sales Return

 

Net Value

Amount
Integrated Tax Central Tax State Tax /UT Tax
1 2 3 4 5 6 7
7A.      TDS
7B.      TCS

Section 49(1) relates to maintaining Electronic Cash Ledger

Section 49 (2): The input tax credit as self-assessed ‘in the return’ of a registered person shall be credited to his electronic credit ledger, in accordance with section 41, to be maintained in such manner as may be prescribed.

(Rule 86)

Power of inspection, search and seizure. ( Section 67)

(1) Where the proper officer, not below the rank of Joint Commissioner, has reasons to believe that––

(a) a taxable person has suppressed any transaction relating to supply of goods or services or both or the stock of goods in hand, or has claimed input tax credit in excess of his entitlement under this Act or has indulged in contravention of any of the provisions of this Act or the rules made thereunder to evade tax under this Act; or….

(Rule 139)

Eligibility and conditions for taking input tax credit.( Section 16)

(1) Every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49, be entitled to take credit of input tax “charged” on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person.

(Rule 36)

(2) Notwithstanding anything contained in this section, no registered person shall be entitled to the credit of any input tax in respect of any supply of goods or services or both to him unless,–

(a) he is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying documents as may be prescribed;

(b) he has received the goods or services or both.

Explanation.—For the purposes of this clause, it shall be deemed that the registered person has received the goods where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise;

(c) subject to the provisions of section 41, the tax charged in respect of such supply has been actually paid to the Government, either in cash or through utilisation of input tax credit admissible in respect of the said supply; and

(d) he has furnished the return under section 39:

Provided that where the goods against an invoice are received in lots or instalments, the registered person shall be entitled to take credit upon receipt of the last lot or instalment:

Provided further that where a recipient fails to pay to the supplier of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, the amount towards the value of supply along with tax payable thereon within a period of one hundred and eighty days from the date of issue of invoice by the supplier, an amount equal to the input tax credit availed by the recipient shall be added to his output tax liability, along with interest thereon, in such manner as may be prescribed:

Provided also that the recipient shall be “entitled to avail of the credit of input tax”

on payment made by him of the amount towards the value of supply of goods or

services or both along with tax payable thereon.

( Rule 36,37 and 69)

(3) Where the registered person has claimed depreciation on the tax component of the

cost of capital goods and plant and machinery under the provisions of the Income-tax Act, 1961, the input tax credit on the said tax component shall not be allowed.

(4) A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the due date of furnishing of the return under section 39 for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier.

(Read with Section 39)

Entitled to take credit of Input tax in special circumstances   : Section 18      

(1) Subject to such conditions and restrictions as may be prescribed—

(a) a person who has applied for registration under this Act within thirty days from the date on which he becomes liable to registration and has been granted such registration shall be entitled to take credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the day immediately preceding the date from which he becomes liable to pay tax under the provisions of this Act;

(b) a person who takes registration under sub-section (3) of section 25 shall be entitled to take credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the day immediately preceding the date of grant of registration;

(c) where any registered person ceases to pay tax under section 10, he shall be entitled to take credit of input tax in respect of inputs held in stock, inputs contained in semi-finished or finished goods held in stock and on capital goods on the day immediately preceding the date from which he becomes liable to pay tax under section 9:

Provided that the credit on capital goods shall be reduced by such percentage points as may be prescribed;

(d) where an exempt supply of goods or services or both by a registered person becomes a taxable supply, such person shall be entitled to take credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock relatable to such exempt supply and on capital goods exclusively used for such exempt supply on the day immediately preceding the date from which such supply becomes taxable:

Provided that the credit on capital goods shall be reduced by such percentage points as may be prescribed.

(Rule 40) and Commissioner Circular 96/15/2019 dt 28.03.2019.

Taking input tax credit in respect of inputs and capital goods sent for job work. Section 19

(2) Notwithstanding anything contained in clause (b) of sub-section (2) of section 16, the principal shall be entitled to take credit of input tax on inputs even if the inputs are directly sent to a job worker for job work without being first brought to his place of business

(5) Notwithstanding anything contained in clause (b) of sub-section (2) of section 16,the principal shall be entitled to take credit of input tax on capital goods even if the capital goods are directly sent to a job worker for job work without being first brought to his place

SHALL NOT’BE ELIGIBLE TO TAKE INPUT TAX CREDIT

Section 10: (4) A taxable person to whom the provisions of sub-section (1) apply shall not collect any tax from the recipient on supplies made by him nor shall he be entitled to any credit of input tax.

Section 16: (4) A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the due date of furnishing of the return under section 39 for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier

Section 18 (2) A registered person shall not be entitled to take input tax credit under sub-section (1) in respect of any supply of goods or services or both to him after the expiry of one year from the date of issue of tax invoice relating to such supply.

(Rule 40)

‘ENTITLED TO AVAIL’ THE INPUT TAX CREDIT ( reclaimed) :

Section 16(2)

 Second proviso: Provided further that where a recipient fails to pay to the supplier of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, the amount towards the value of supply along with tax payable thereon within a period of one hundred and eighty days from the date of issue of invoice by the supplier, an amount equal to the input tax credit availed by the recipient shall be added to his output tax liability, along with interest thereon, in such manner as may be prescribed:

( Rule37)

Third Proviso: Provided also that the recipient shall be entitled to avail of the credit of input tax” on payment made by him of the amount towards the value of supply of goods or services or both along with tax payable thereon.

( Rule37)

BLOCKED CREDIT – CIRCUMSTANCES UNDER WHICH THE INPUT TAX CREDIT ‘SHALL NOT BE AVAILABLE’:

Section 17 (5)  Notwithstanding anything contained in sub-section (1) of section 16 and subsection (1) of section 18, input tax credit shall not be available in respect of the following, namely:

(a) motor vehicles and other conveyances except when they are used––

(i) for making the following taxable supplies, namely:—

(A) further supply of such vehicles or conveyances ; or

(B) transportation of passengers; or

(C) imparting training on driving, flying, navigating such vehicles or conveyances;

(ii) for transportation of goods;

(b) the following supply of goods or services or both—

(i) food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery except where an inward supply of goods or services or both of a particular category is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply;

(ii) membership of a club, health and fitness centre;

(iii) rent-a-cab, life insurance and health insurance except where––

(A) the Government notifies the services which are obligatory for an employer to provide to its employees under any law for the time being in force; or

(B) such inward supply of goods or services or both of a particular category is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as part of a taxable composite or mixed supply; and

(iv) travel benefits extended to employees on vacation such as leave or home travel concession;

(c) works contract services when supplied for construction of an immovable property (other than plant and machinery) except where it is an input service for further supply of works contract service;

(d) goods or services or both received by a taxable person for construction of an immovable property (other than plant or machinery) on his own account including when such goods or services or both are used in the course or furtherance of business.

Explanation.––For the purposes of clauses (c) and (d), the expression

“construction” includes re-construction, renovation, additions or alterations or repairs, to the extent of capitalisation, to the said immovable property;

(e) goods or services or both on which tax has been paid under section 10;

(f) goods or services or both received by a non-resident taxable person except on goods imported by him;

(g) goods or services or both used for personal consumption;

(h) goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples; and

(ii) any tax paid in accordance with the provisions of sections 74, 129 and 130.

CIRCUMSTANCES UNDER WHICH “INPUT TAX CREDIT ALLOWED”:

Section 18 (3) :  Where there is a change in the constitution of a registered person on account of sale, merger, demerger, amalgamation, lease or transfer of the business with the specific provisions for transfer of liabilities, the said registered person shall be allowed to transfer the input tax credit which remains unutilised in his electronic credit ledger to such sold, merged, demerged, amalgamated, leased or transferred business in such manner as may be prescribed

( Rule 41)

Section : 19. (1) The principal shall, subject to such conditions and restrictions as may be prescribed, be allowed input tax credit on inputs sent to a job worker for job work.

(Rule 45)

Section : 19 (4) The principal shall, subject to such conditions and restrictions as may be prescribed, be allowed input tax credit on capital goods sent to a job worker for job work.

Claim for “REFUND” on account of Zero Rated supply of goods or services or both:

SECTION 54: (6) Notwithstanding anything contained in sub-section (5), the proper officer may, in the case of any claim’ for refund on account of zero-rated supply of goods or services or both made by registered persons, other than such category of registered persons as maybe notified by the Government on the recommendations of the Council, refund on a provisional basis, ninety per cent. of the total amount so claimed, excluding the amount of input tax credit provisionally accepted, in such manner and subject to such conditions, limitations and safeguards as may be prescribed and thereafter make an order under sub-section (5) for final settlement of the refund claim after due verification of documents furnished by the applicant.

(Rule 91)

Entitled to claim Refund in certain cases :

Section 55: The Government may, on the recommendations of the Council, by notification, specify any specialised agency of the United Nations Organisation or any Multilateral Financial Institution and Organisation notified under the United Nations (Privileges and Immunities) Act, 1947, Consulate or Embassy of foreign countries and any other person or class of persons as may be specified in this behalf, who shall, subject to such conditions and restrictions as may be prescribed, be ‘entitled to claim a refund of taxes paid’ on the notified supplies of goods or services or both received by them.

Refund claimed Interest on Delayed Refund:

Section 56: …….. Provided that where any claim of refund arises from an order passed by an adjudicating authority or Appellate Authority or Appellate Tribunal or court which has attained finality and the same is not refunded within sixty days from the date of receipt of application filed consequent to such order, interest at such rate not exceeding nine per cent. as may be notified by the Government on the recommendations of the Council shall be payable in respect of such refund from the date immediately after the expiry of sixty days from the date of receipt of application till the date of refund

CIRCUMSTANCE UNDER WHICH INPUT TAX CREDIT NOT ALLOWED:

Section 16 (3):  Where the registered person has claimed depreciation on the tax component of the cost of capital goods and plant and machinery under the provisions of the Income-tax Act, 1961, the input tax credit on the said tax component shall not be allowed.

Apportionment of credit ( Credit restricted) : Section 17

(1) Where the goods or services or both are used by the registered person partly for the purpose of any business and partly for other purposes, the amount of credit shall be restricted to so much of the input tax as is attributable to the purposes of his business.

(2) Where the goods or services or both are used by the registered person partly for effecting taxable supplies including zero-rated supplies under this Act or under the Integrated Goods and Services Tax Act and partly for effecting exempt supplies under the said Acts, the amount of credit shall be restricted to so much of the input tax as is attributable to the said taxable supplies including zero-rated supplies.

(3) The value of exempt supply under sub-section (2) shall be such as may be prescribed, and shall include supplies on which the recipient is liable to pay tax on reverse charge basis, transactions in securities, sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building.

(Rule 42 and 43)

(4) A banking company or a financial institution including a non-banking financial company, engaged in supplying services by way of accepting deposits, extending loans or advances shall have the option to either comply with the provisions of sub-section (2), or avail of, every month, an amount equal to fifty per cent. of the eligible input tax credit on inputs, capital goods and input services in that month and the rest shall lapse:

Provided that the option once exercised shall not be withdrawn during the remaining part of the financial year:

Provided further that the restriction of fifty per cent. shall not apply to the tax paid on supplies made by one registered person to another registered person having the same Permanent Account Number.

“Entitled to take” the CENVAT Credit/ duty in his Electronic Credit Ledger:

Section 140: (1) A registered person, other than a person opting to pay tax under section 10, shall be entitled to take, in his electronic credit ledger, the amount of CENVAT credit carried forward in the return relating to the period ending with the day immediately preceding the appointed day, furnished by him under the existing law in such manner as may be prescribed:

Provided that the registered person shall not be allowed to take credit in the following circumstances, namely:

(i) where the said amount of credit is not admissible as input tax credit under this Act; or

(ii) where he has not furnished all the returns required under the existing law for the period of six months immediately preceding the appointed date; or

(iii) where the said amount of credit relates to goods manufactured and cleared under such exemption notifications as are notified by the Government.

(Rule 117)

(2) A registered person, other than a person opting to pay tax under section 10, shall be entitled to take, in his electronic credit ledger, credit of the unavailed CENVAT credit in respect of capital goods, not carried forward in a return, furnished under the existing law by him, for the period ending with the day immediately preceding the appointed day in such manner as may be prescribed:

Provided that the registered person shall not be allowed to take credit unless the said credit was admissible as CENVAT credit under the existing law and is also admissible as input tax credit under this Act.

Explanation.––For the purposes of this sub-section, the expression “unavailed CENVAT credit” means the amount that remains after subtracting the amount of CENVAT credit already availed in respect of capital goods by the taxable person under the existing law from the aggregate amount of CENVAT credit to which the said person was entitled in respect of the said capital goods under the existing law.

(3) A registered person, who was not liable to be registered under the existing law, or who was engaged in the manufacture of exempted goods or provision of exempted services, or who was providing works contract service and was availing of the benefit of notification No. 26/2012—Service Tax, dated the 20th June, 2012 or a first stage dealer or a second stage dealer or a registered importer or a depot of a manufacturer, shall be entitled to take, in his electronic credit ledger, credit of eligible duties in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the appointed day subject to the following conditions, namely:––

(i) such inputs or goods are used or intended to be used for making taxable supplies under this Act;

(ii) the said registered person is eligible for input tax credit on such inputs under this Act;

(iii) the said registered person is in possession of invoice or other prescribed documents evidencing payment of duty under the existing law in respect of such inputs;

(iv) such invoices or other prescribed documents were issued not earlier than twelve months immediately preceding the appointed day; and

(v) the supplier of services is not eligible for any abatement under this Act:

( Rule 117)

 “Allowed” to take the CENVAT Credit/ duty in his Electronic Credit Ledger:

Section 140 (3):  …….Provided that where a registered person, other than a manufacturer or a supplier of services, is not in possession of an invoice or any other documents evidencing payment of duty in respect of inputs, then, such registered person shall, subject to such conditions, limitations and safeguards as may be prescribed, including that the said taxable person shall pass on the benefit of such credit by way of reduced prices to the recipient, be allowed to take credit at such rate and in such manner as may be prescribed.

( Rule 117)

Section 140 (8):  Where a registered person having centralised registration under the existing law has obtained a registration under this Act, such person shall be allowed to take, in his electronic credit ledger, credit of the amount of CENVAT credit carried forward in a return, furnished under the existing law by him, in respect of the period ending with the day immediately preceding the appointed day in such manner as may be prescribed:

Provided that if the registered person furnishes his return for the period ending with the day immediately preceding the appointed day within three months of the appointed day, such credit shall be allowed subject to the condition that the said return is either an original return or a revised return where the credit has been reduced from that claimed earlier:

Provided further that the registered person shall not be allowed to take credit unless the said amount is admissible as input tax credit under this Act:

Provided also that such credit may be transferred to any of the registered persons having the same Permanent Account Number for which the centralised registration was obtained under the existing law.

( Rule 117)

Section 140 : (9) Where any CENVAT credit availed for the input services provided under the existing law has been reversed due to non-payment of the consideration within a period of three months, such credit can be reclaimed subject to the condition that the registered person has made the payment of the consideration for that supply of services within a period of three months from the appointed day

( Rule 117)

Conditions to Allow CENVAT tax Refund/ Allowed to reduce his tax liability:

Section 142 (2) (b):  where, in pursuance of a contract entered into prior to the appointed day, the price of any goods or services or both is revised downwards on or after the appointed day, the registered person who had removed or provided such goods or services or both may issue to the recipient a credit note, containing such particulars as may be prescribed, within thirty days of such price revision and for the purposes of this Act such credit note shall be deemed to have been issued in respect of an outward supply made under this Act:

Provided that the registered person shall be allowed to reduce his tax liability on account of issue of the credit note only if the recipient of the credit note has reduced his input tax credit corresponding to such reduction of tax liability.

( Rule 53 )

Section 142 (3):  Every claim for refund filed by any person before, on or after the appointed day, for refund of any amount of CENVAT credit, duty, tax, interest or any other amount paid under the existing law, shall be disposed of in accordance with the provisions of existing law and any amount eventually accruing to him shall be paid in cash, notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944:

Provided that where any claim for refund of CENVAT credit is fully or partially rejected, the amount so rejected shall lapse:

Provided further that no refund shall be allowed of any amount of CENVAT credit where the balance of the said amount as on the appointed day has been carried forward under this Act.

Section 142 : (4) Every claim for refund filed after the appointed day for refund of any duty or tax paid under existing law in respect of the goods or services exported before or after the appointed day, shall be disposed of in accordance with the provisions of the existing law:

Provided that where any claim for refund of CENVAT credit is fully or partially rejected, the amount so rejected shall lapse:

Provided further that no refund shall be allowed of any amount of CENVAT credit where the balance of the said amount as on the appointed day has been carried forward under this Act.

Section 142  : (5) Every claim filed by a person after the appointed day for refund of tax paid under the existing law in respect of services not provided shall be disposed of in accordance with the provisions of existing law and any amount eventually accruing to him shall be paid in cash, notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944.

Section 142 (6) (a): Every proceeding of appeal, review or reference relating to a claim for CENVAT credit initiated whether before, on or after the appointed day under the existing law shall be disposed of in accordance with the provisions of existing law, and any amount of credit found to be admissible to the claimant shall be refunded to him in cash, notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 and the amount rejected, if any, shall not be admissible as input tax credit under this Act:

Provided that no refund shall be allowed of any amount of CENVAT credit where the balance of the said amount as on the appointed day has been carried forward under this Act;

( Rule 142A)

CLAIM THE INPUT TAX CREDIT:

Claiming Refund of any tax and interest paid

Section 54  (1) Any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, may make an application before the expiry of two years from the relevant date in such form and manner as may be prescribed:

Provided that a registered person, claiming refund of any balance in the electronic cash ledger in accordance with the provisions of sub-section (6) of section 49, may claim such refund in the return furnished under section 39 in such manner as may be prescribed

( Rule 89) 

In the case of claiming Refund of input tax credit / unutilised input tax credit conditions prescribed to allow the amount:

Section 54 (3) Subject to the provisions of sub-section (10), a registered person may claim refund of any unutilised input tax credit at the end of any tax period:

Provided that no refund of unutilised input tax credit shall be allowed in cases other than––

(i) zero rated supplies made without payment of tax;

(ii) where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies), except supplies of goods or services or both as may be notified by the

Government on the recommendations of the Council:

Provided further that no refund of unutilised input tax credit shall be allowed in cases where the goods exported out of India are subjected to export duty:

Provided also that no refund of input tax credit shall be allowed, if the supplier of goods or services or both avails of drawback in respect of central tax or claims refund of the integrated tax paid on such supplies.

Input tax credit  Availed to be recorded in the books of account and in the return:

Section 35:

 (1) Every registered person shall keep and maintain, at his principal place of business, as mentioned in the certificate of registration, a true and correct account of—

(a) production or manufacture of goods;

(b) inward and outward supply of goods or services or both;

(c) stock of goods;

(d) input tax credit availed;

(e) output tax payable and paid; and

(f) such other particulars as may be prescribed:

Provided that where more than one place of business is specified in the certificate of registration, the accounts relating to each place of business shall be kept at such places of business:

Provided further that the registered person may keep and maintain such accounts and other particulars in electronic form in such manner as may be prescribed.

( Rule 57)

Furnishing of Return under Section 39.

  • Every registered person, other than an Input Service Distributor or a non-resident taxable person or a person paying tax under the provisions of section 10 or section 51 or section 52 shall, for every calendar month or part thereof, furnish, in such form and manner as may be prescribed, a return, electronically, of inward and outward supplies of goods or services or both,

input tax credit availed,

tax payable,

tax paid and such other particulars as may be prescribed,

on or before the twentieth day of the month succeeding such calendar month or part thereof.

( Rule 61)

Claimed Input tax Credit’Matching, reversal and reclaim of input tax credit, interest attract from the date of ‘availing input tax credit’- circumstances.

Section 42 (3) :  Where the input tax credit ‘claimed’ by a recipient in respect of an inward supply is in excess of the tax declared by the supplier for the same supply or the outward supply is not declared by the supplier in his valid returns, the discrepancy shall be communicated to both such persons in such manner as may be prescribed.

( Rule 71)

(4) The duplication of ‘claims’ of input tax credit shall be communicated to the recipient in such manner as may be  prescribed.

( Rule 72)

(5) The amount in respect of which any discrepancy is communicated under sub-section (3) and which is not rectified by the supplier in his valid return for the month in which discrepancy is communicated shall be added to the output tax liability of the recipient, in such manner as may be prescribed, in his return for the month succeeding the month in which the discrepancy is communicated.

(6) The amount claimed as input tax credit that is found to be in excess on account of duplication of claims shall be added to the output tax liability of the recipient in his return for the month in which the duplication is communicated.

(7) The recipient shall be eligible to reduce, from his output tax liability, the amount added under sub-section (5), if the supplier declares the details of the invoice or debit note in his valid return within the time specified in sub-section (9) of section 39.

(8) A recipient in whose output tax liability any amount has been added under sub-section (5) or sub-section (6), shall be liable to pay interest at the rate specified under sub-section (1) of section 50 on the amount so added from the date of availing of credit till the corresponding additions are made under the said sub-sections.

Matching, reversal and reclaim of reduction in output tax liability:

Section 43:

(1) The details of every credit note relating to outward supply furnished by a registered person (hereafter in this section referred to as the “supplier) for a tax period shall, in such manner and within such time as may be prescribed, be matched––

(a) with the corresponding reduction in the ‘claim’ for input tax credit by the corresponding registered person (hereafter in this section referred to as the “recipient”) in his valid return for the same tax period or any subsequent tax period; and

(b) for duplication of claims for reduction in output tax liability.

(Rule 73)

(2) The ‘claimfor reduction in output tax liability by the supplier that matches with the corresponding reduction in the claim for input tax credit by the recipient shall be finally accepted and communicated, in such manner as may be prescribed, to the supplier.

(Rule 74)

(3) Where the reduction of output tax liability in respect of outward supplies exceeds the corresponding reduction in the claim for input tax credit or the corresponding credit note is not declared by the recipient in his valid returns, the discrepancy shall be communicated to both such persons in such manner as may be prescribed.

(Rule 75)

(4) The duplication of claims’ for reduction in output tax liability shall be communicated to the supplier in such manner as may be prescribed.

( Rule 76)

(5) …….

(6) The amount in respect of any reduction in output tax liability that is found to be on account of duplication of claims shall be added to the output tax liability of the supplier in his return for the month in which such duplication is communicated

(7) …..

(8) A supplier in whose output tax liability any amount has been added under sub-section (5) or sub-section (6), shall be liable to pay interest at the rate specified under sub-section (1) of section 50 in respect of the amount so added from the date of such claim for reduction in the output tax liability till the corresponding additions are made under the said sub-sections.

Under TDS clause, When a deductee can claim credit in his electronic cash ledger:

Section 51 : (5) The deductee shall claim credit, in his electronic cash ledger, of the tax deducted and reflected in the return of the deductor furnished under sub-section (3) of section 39, in such manner as may be prescribed.

( Rule 87)

Under TCS clause, when a supplier can claim credit in his electronic cash ledger:

Section 52 : (4) Every operator who collects the amount specified in sub-section (1) shall furnish a statement, electronically, containing the details of outward supplies of goods or services or both effected through it, including the supplies of goods or services or both returned through it, and the amount collected under sub-section (1) during a month, in such form and manner as may be prescribed, within ten days after the end of such month.

( Rule 67)

(7) The supplier who has supplied the goods or services or both through the operator shall claim credit, in his electronic cash ledger, of the amount collected and reflected in the statement of the operator furnished under sub-section (4), in such manner as may be prescribed.

( Rule 87)

Amount ‘Available’ in the Electronic Credit Ledger may be used for ‘Utilisation’ of tax under different heads.

Section 49: (4) The amount available in the electronic credit ledger may be used for making any payment towards output tax under this Act or under the Integrated Goods and Services Tax Act in such manner and subject to such conditions and within such time as may be prescribed.

( Rule 85)

(5) The amount of input tax credit available in the electronic credit ledger of the registered person on account of––

(a) integrated tax shall first be utilised towards payment of integrated tax and the amount remaining, if any, may be utilised towards the payment of central tax and State tax, or as the case may be, Union territory tax, in that order;

(b) the central tax shall first be utilised towards payment of central tax and the amount remaining, if any, may be utilised towards the payment of integrated tax;

(c) the State tax shall first be utilised towards payment of State tax and the amount remaining, if any, may be utilised towards payment of integrated tax;

(d) the Union territory tax shall first be utilised towards payment of Union territory tax and the amount remaining, if any, may be utilised towards payment of integrated tax;

(e) the central tax shall not be utilised towards payment of State tax or Union territory tax; and

(f) the State tax or Union territory tax shall not be utilised towards payment of central tax.

Antiprofiteering measure.:

Section 171 (1) Any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on to the recipient by way of commensurate reduction in prices.

(2) The Central Government may, on recommendations of the Council, by notification, constitute an Authority, or empower an existing Authority constituted under any law for the time being in force, to examine whether input tax credits availed by any registered person or the reduction in the tax rate have actually resulted in a commensurate reduction in the price of the goods or services or both supplied by him.

( Rule 122,123 and 124)

Utilisation of input tax credit availed  and  Central Government shall Transfer the amount  :

Section 53: On utilisation of input tax credit availed under this Act for payment of tax dues under the Integrated Goods and Services Tax Act in accordance with the provisions of sub-section (5) of section 49, as reflected in the valid return furnished under sub-section (1) of section 39, the amount collected as central tax shall stand reduced by an amount equal to such credit so utilised and the Central Government shall transfer an amount equal to the amount so reduced from the central tax account to the integrated tax account in such manner and within such time as may be prescribed.

When a registered person wrongly availed or utilised input tax credit can invite  officer to initiate action under Section 73 or 74  :

Section 65 (7) : Where the audit conducted under sub-section (1) results in detection of

tax not paid or

short paid or

erroneously refunded, or

input tax credit wrongly availed or utilised,

the proper officer may initiate action under section 73 or section 74.

Section 66 :

(1) If at any stage of scrutiny, inquiry, investigation or any other proceedings before him, any officer not below the rank of Assistant Commissioner, having regard to the nature and complexity of the case and the interest of revenue, is of the opinion that  the value has not been correctly declared or the credit availed is not within the normal limits, he may, with the prior approval of the Commissioner, direct such registered person by a communication in writing to get his records including books of account examined and audited by a chartered accountant or a cost accountant as may be nominated by the Commissioner.

(6) Where the special audit conducted under sub-section (1) results in detection of

tax not paid or

short paid or

erroneously refunded, or

input tax credit wrongly availed or utilised,

the proper officer may initiate action under section 73 or section 74.

(  Rule 102)

input tax credit ‘takes or utilise or distribute’ -Penalty for offences   :

Section 122 (1): Where a taxable person who––

(vii) takes or utilises input tax credit without actual receipt of goods or services or both either fully or partially, in contravention of the provisions of this Act or the rules made thereunder;

(ix) takes or distributes input tax credit in contravention of section 20, or the rules made thereunder

( Rule 162)

‘Wrongful availment or Utilisation’ of input tax credit or Tax refund Punishment for certain offences  :

Section 132 (1)

(b) issues any invoice or bill without supply of goods or services or both in violation of the provisions of this Act, or the rules made thereunder leading to wrongful availment or utilisation of input tax credit or refund of tax;

(c) avails input tax credit’ using such invoice or bill referred to in clause (b);

(e) evades tax, ‘fraudulently avails input tax credit’ or fraudulently obtains refund and where such offence is not covered under clauses (a) to (d);

OFFENCES AND PENALTIES: Section 122:

(1) Where a taxable person who––

(i) supplies any goods or services or both without issue of any invoice or issues an incorrect or false invoice with regard to any such supply;

(ii) issues any invoice or bill without supply of goods or services or both in violation of the provisions of this Act or the rules made thereunder;

(iii) collects any amount as tax but fails to pay the same to the Government beyond a period of three months from the date on which such payment becomes due;

(iv) collects any tax in contravention of the provisions of this Act but fails to pay the same to the Government beyond a period of three months from the date on which such payment becomes due;

(v) fails to deduct the tax in accordance with the provisions of sub-section (1) of section 51, or deducts an amount which is less than the amount required to be deducted under the said sub-section, or where he fails to pay to the Government under sub-section (2) thereof, the amount deducted as tax;

(vi) fails to collect tax in accordance with the provisions of sub-section (1) of section 52, or collects an amount which is less than the amount required to be collected under the said sub-section or where he fails to pay to the Government the amount collected as tax under sub-section (3) of section 52;

(vii) takes or utilises input tax credit without actual receipt of goods or services or both either fully or partially, in contravention of the provisions of this Act or the rules made thereunder;

(viii) fraudulently obtains refund of tax under this Act;

(ix) takes or distributes input tax credit in contravention of section 20, or the rules made thereunder;

(x) falsifies or substitutes financial records or produces fake accounts or documents or furnishes any false information or return with an intention to evade payment of tax due under this Act;

(xi) is liable to be registered under this Act but fails to obtain registration;

(xii) furnishes any false information with regard to registration particulars, either at the time of applying for registration, or subsequently;

(xiii) obstructs or prevents any officer in discharge of his duties under this Act;

(xiv) transports any taxable goods without the cover of documents as may be specified in this behalf;

(xv) suppresses his turnover leading to evasion of tax under this Act;

(xvi) fails to keep, maintain or retain books of account and other documents in accordance with the provisions of this Act or the rules made thereunder;

(xvii) fails to furnish information or documents called for by an officer in accordance with the provisions of this Act or the rules made thereunder or furnishes false information or documents during any proceedings under this Act;

(xviii) supplies, transports or stores any goods which he has reasons to believe are liable to confiscation under this Act;

(xix) issues any invoice or document by using the registration number of another registered person;

(xx) tampers with, or destroys any material evidence or document;

(xxi) disposes off or tampers with any goods that have been detained, seized, or attached under this Act,

he shall be liable to pay a penalty of ten thousand rupees or
an amount equivalent to

the tax evaded or

the tax not deducted under section 51 or

short deducted or deducted but not paid to the Government or

tax not collected under section 52 or

short collected or collected but not paid to the Government or

input tax credit availed of or passed on or distributed irregularly, or the refund claimed fraudulently, whichever is higher.

( Rule 162).

Rule ( 69) :  Matching of claim of input tax credit .-The following details relating to the claim of input tax credit on inward supplies including imports, provisionally allowed under section 41, shall be matched under section 42 after the due date for furnishing the return in FORM GSTR-3

(a) Goods and Services Tax Identification Number of the supplier;

(b) Goods and Services Tax Identification Number of the recipient;

(c) invoice or debit note number;

(d) invoice or debit note date; and

(e) tax amount:

Provided that where the time limit for furnishing FORM GSTR-1 specified under section 37and FORM GSTR-2 specified under section 38 has been extended, the date of matching relating to claim of input tax credit shall also be extended accordingly:

Provided further that the Commissioner may, on the recommendations of the Council, by order, extend the date of matching relating to claim of input tax credit to such date as may be specified therein.

Explanation.- For the purposes of this rule, it is hereby declared that –

(i) The claim of input tax credit in respect of invoices and debit notes in FORM GSTR-2 that were accepted by the recipient on the basis of FORM GSTR-2A without amendment shall be treated as matched if the corresponding supplier has furnished a valid return;

(ii) The claim of input tax credit shall be considered as matched where the amount of input tax credit claimed is equal to or less than the output tax paid on such tax invoice or debit note by the corresponding supplier.

Burden of Proof:

Section 155 : Where any person claims that he is eligible for input tax credit under this Act, the burden of proving such claim shall lie on such person

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