1.1 is less than Rs. 1.5 crore.Guidelines for

1.1 ITC is core provision
of GST.Input Tax Credit is the
most basic concept of GST as GST avoids cascading effects of taxes. As per GST Model
law 2016, “Input tax credit” is credit of input tax(IGST/SGST) levied on
taxable person for supply goods or services used. Input tax credit explains
that whenever a manufacturer pays the tax on output and it can be used to
reduce its tax liability on the input when it makes a sale. Business can claim
the credit to the extent of GST paid on purchases. 1.2 Claiming ITCITC is claimed only when
it is for the business purpose. ITC will not be applied for goods and services
used for personal use, exempted items or where guidelines are not available. It
can be claimed only by the person provides detail specification about his
suppliers in the GST returns, however discrepancies will be communicated.A person registered under
composition scheme in GST cannot claim ITC. Under composition Scheme of GST, small
taxpayers can pay GST at a fixed rate of turnover, whose turnover is less than
Rs. 1.5 crore.Guidelines for reversal or ineligible of Input Tax
Credit ·       Due payment of Invoices
within 180 days ·       Credit note issued to ISD by
Inputs and capital goods
used for personal purpose·      
Inputs and capital goods
used for providing exempted supplies 1.4 Documentation needed for Claiming ITC (i) GST Tax InvoiceBeing most essential item
for claiming ITC is bill of a list of goods. As per GST model Law 2016 defined time
limit is defined to issue GST tax invoices,
revised bills, debit notes and credit note.(ii) Goods and Service
receivedAt the time of tax credit refund,
the goods and services shall have to be claimed. Proof of actual tax paid by
either dealer or supplier to government needs to required in the process of
refund of ITC under GST.(iii) Furnishing of GST
returnAs per GST model law 2016,
GST taxpayers has to file returns to concerned GST authorities. 1.5 Input Tax Credit of
Capital goodsCGST Act Sec (19) explains “Capital goods” as “Value
which is capitalized in the book of accounts of person claiming the Input Tax
Credits”. Goods are explained as (i)            
All goods falling under Chapter 82, Chapter 84, Chapter 85
and Chapter 90 of GST.(ii)          
Pollution control equipment (iii)        
Components, spares and accessories of above defined goods(iv)         
Tubes, pipes, fittings and storage tanks 1.6 Recovery of ITC wrongly takenClause 16(16) of GST Model Law,2016 say credit taken
wrongly, shall be recovered from registered taxable person as prescribed in the
clause. 1.7 Detailed provision switching tax structure to GST.Provision is summarised as:Cenvat credit carried forward Eligible Cenvat credit can
be carried forward as per GST Model Law State VAT credit carried forwardEligible state VAT credit
can be carried forward as per GST Model Law Unveiled Cenvat Credit on Capital goodsUnveiled Cenvat Credit on
eligible capital goods not carried forward in return as per GST Model Law Unveiled State VAT Credit on Capital goods  Unveiled state VAT on
eligible capital goods not carried forward in return as per GST Model Law Eligible duties and taxes on goods which were exempted
prior to GST- Few goods are presently
exempted from excise duty and hence Cenvat Credit or State VAT was not
available and may come under GST. In such cases, Input tax credit of specified
duties paid on such inputs and contained in semi-finished and finished which
are in stock on the date of introduction of GST. Exempted goods returned to the place of businessGoods which were exempted
earlier but now comes under GST are returned to place of business within 6
months from introduction of GST, these will be exempted from tax Distribution of credit by Input service distributer of
service invoices received after GSTInput service distributer
can distribute credit in respect of services received prior to GST, even if invoices
of such service received after introduction of GST. 1.8 Input Service Distributor
(ISD)Suppliers of goods and
services may have different head offices or regional offices at different
places, and are used for providing output service. Such offices can get
registerd under GST as ‘Input Service Distributor’  



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