INPUT TAX CREDIT
With the continuing sensations of GST law and implementation, the mechanism can only function when rest on ITC i.e Input tax credit. Input Tax credit can be defined as at the time of paying tax on output, one can reduce the tax he,/she have already paid on inputs. Any individual can avail to input tax credit only if he/she is registered under the GST law model. In a nutshell, this means, if you are a manufacturer, a dealer, operational agents or suppliers, you are only eligible for the input tax credit once registered and can claim paid by you on the purchases you made. Input tax has been definitely enabled in the section 2(57) of the model GST law and section 2(1)(d) of the GST Act. To be accurate, any individual should be clear with the IGST Act, input tax which is defined as IGST, CGST or SGST charged on any supply of goods and or services. Here, input tax credit availing situations is followed with examples for an understanding of the process has become the need. There are situations, where you can’t avail this credit. And also, there are goods and services where the availing of the input tax credit is hesitant. Like for example :motor vehicles and conveyance, food and beverages, outdoor catering, beauty and fitness treatment or health services such as cosmetic and plastic surgeries There are also services such as taking membership for health and fitness clubs, renting vehicle services, insurances such as life and health insurance taken for employees are all where input tax credit cannot be availed. Some of the situational unavailing of input tax credit are as follows :
- Registration: A tax payer is only liable when registered within 30 days of Input tax credit. Or else, he/she can lose the input tax credit that he/ she is eligible to avail om the inputs on semi or finished goods, a day before he/she is liable to pay the tax.
- When the times up: there is a situation handle where a taxpayer to avail ITC, he/she must do the registration and availment within 1 year from the date of the invoice of the goods.
- Input tax credit cannot be availed by the composition taxpayers on goods and services and also for personal consumption.
- Stolen or lost: ITC cannot be availed on goods and services that are by any chance lost, stolen or destroyed or didn’t reach the consumers, or as gift samples or free promotional.
So when we know about the avail of ITC, we too tend to know how to invest and how the functionality helps in surveillance of the taxpayers. GST law to implement within 4 days from now. And to be prepared is a must tale for all the taxpayers. Be it a supplier, distributor, business men or any lay men of this country. GST law will effect surely to everyone living in this country. From small entrepreneurs to large business, from a tea shop to the luxury car makers, GST law model tends to encourage with furnishing input tax credit bones.