Claiming GST Input Tax Credit? Here’s a checklist for you!
Seamless availability of Input Tax Credit (ITC) is the highlight of the GST regime. For any tax regime, the flow of credits is an integral part. It determines the cascading effect of taxes and the tax cost that forms part of each product to the ultimate consumer. Under the GST regime, the law specifies conditions which if fulfilled permits the taxpayer to avail credit. These conditions include:
1. Possessing the tax invoice/ debit note/ any other document as prescribed
2. Receipt of goods and/or services
3. Tax charged by the supplier has been paid to the government
4. GST summary return has been furnished
Further, the time limit to avail ITC is the date of furnishing the annual return or the return for the month of September following the end of the financial year. Furthermore, ITC is available only for the furtherance of business and for effecting taxable supplies. There are restrictions on ITC eligibility in respect of certain items such as motor vehicles, works contract services, food, and beverages, health services, etc. (with exceptions available). Additionally, the GST regime has envisaged allowing credits only if they match with the GST paid by the supplier. Read full article on Cygnet GSP
