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How to take input tax credit under GST ?
How to take input tax credit under GST ?
Hey businessmen, we have handcrafted this article for you. In this article we will discuss about inputs and how you will be able to get input tax credit in GST.The core of GST and the business is its availability to avail credit of input tax paid on all inputs and input services used in the business. An attempt has been in this note to to analyze the provisions contained in the Model GST laws relating to input tax and credit thereof.
We shall first try to look at the definition of input as contained in the Model GST laws. “input” means any goods other than capital goods used or intended to be used by a supplier in the course or furtherance of business.
“input service” means any service used or intended to be used by a supplier in the course or furtherance of business.
The definition is much more wider in import and meaning and allows the availment of credit on all inputs and input services which are used or intended to be used in the course or furtherance of business .
The definition of Input tax is contained in Sec 2 Sec (55) and it defines "input tax" in relation to a taxable person, means the IGST, including that on import of goods, CGST and SGST charged on any supply of goods or services to him, but does not include the tax paid under section 9 (under composition scheme).
Input Tax credit under Sec 2(56) has been defined as “input tax credit” means credit of ‘input tax’.
Conditions to avail Input Tax Credit.
To avail the Input Tax Credit the following conditions have been prescribed-
- He should be registered taxable person.
- 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.
- He should have received the goods and/or services.
- The tax charged in respect of such supply has been actually paid to the account of the appropriate Government, either in cash or through utilization of input tax credit admissible in respect of the said supply.
- The Supplier has furnished a return.
The person effecting the supply i.e., the supplier is required to file his return of outward supplies by the 10th of every month succeeding the month to which the outward supply relates .A return so filed will be available by means of auto population i.e., prefilled to the Buyer in his inward return on the 10th and the buyer will have to check his return of inward supply and either add, accept , modify or reject the credit which he shall do by the 15th of the following month.
Only those credits which have been electronically matched and after eliminating duplicate credits if any will be available to the Buyer as credit for Availment.
