Home » GST » Articles » Decoding of ITC Rules : CGST & SGST Provisions

Decoding of ITC RulesThe Draft GST ITC Rules made public by Council, which is a complete set of provisions pertaining to the Input Tax Credit combining with the provisions of CGST/SGST Acts.

The provisions of ITC Rules broadly contain broadly the following issues:

• How much credit of Input tax shall be available to credit on Electronic Credit Ledger;
• Under what conditions these credits are available;
• What kinds of reporting and disclosure required for availing ITC;
• Under what circumstances the ITC will revise and what are the consequences thereof;
• What are the provision to deals with special taxpayers and special circumstances?

The draft Rules are bit complicated in the comparison with the present provision of CENVAT, particularly with respect to the ITC related with Capital Goods.

Here we list out 10 Rules of ITC in CGST/SGST Acts.

Rule 1. Documentary requirements and conditions for claiming input tax credit.
Rule 2. Reversal of input tax credit in case of non-payment of consideration.
Rule 3. Claim of credit by a banking company or a financial institution.
Rule 4. Procedure for distribution of input tax credit by Input Service Distributor (ISD).
Rule 5. Manner of claiming credit in special circumstances: ITC Manner of Pro-Rata Distribution.
Rule 6. Transfer of credit on sale, merger, amalgamation, lease or transfer of a business.
Rule 7. Manner of determination of ITC in certain cases and reversal thereof.
Rule 8. Manner of determination of ITC in respect of capital goods and reversal thereof in certain cases.
Rule 9. Manner of reversal of credit under special circumstances.
Rule10: Conditions and restriction in respect of inputs and capital goods sent to the job worker.

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DECODING THE ITC RULES: GST

Written by: Mr. Mr. Sahay Vineet – CS, Senior Manager Taxation

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