EXAMPLE-111
ABC
Ltd a manufacturer supplied goods during the month of August of value Rs 50 lakh
and the output tax liability on such goods as Central tax Rs 1 lakh , State tax
Rs. 1 lakh and Integrated tax Rs. 3 lakh. Followings are the details of GST on
input and input services during the month.
|
S.No. |
Particulars |
Tax
Paid on Input/ IS |
Remarks |
|
1 2. 3. 4. 5. 6. |
Motor
spirit Input
“A” Input
Service Storage
tank Air
conditioners used in the office of fixed establishment Motor
vehicle purchased used for transportation of goods |
30,000 CGST
= 40,000 SGST
=40,000 IGST
= 18000 IGST
=18000 SGST
= 5000
CGST
=50000 SGST
=50000 |
Special
excise duty Full
order of input received but invoice that
relates to goods on which CGST liability 5000 and SGST liability
5000 is received in September |
Determine
the tax payable and utilisation of credit for payment of tax for the month of August.
Answer
GST paid for the month of August
|
S.No. |
Particulars |
CGST |
SGST |
IGST |
|
1 2. 3. 4. 5. 6. |
Output
tax liability
Input
tax credit available Motor
spirit Input
“A” Input
Service Storage
tank Air
conditioners used in the office of fixed establishment Motor
vehicle purchased used for transportation of goods |
1,00,000 Nil 35,000 Nil Nil 5,000 50,000 |
1,00,000 Nil 35,000 Nil Nil 5,000 50,000 |
3,00,000 Nil Nil 18,000 18,000 Nil Nil |
|
|
Total
input credit |
90,000 |
90,000 |
36,000 |
|
|
Liability
paid in cash after setting off of credit |
10,000 |
10,000 |
264000 |
Notes:-
1.
However,
under GST regime supply of petroleum crude, high speed diesel, motor spirit (commonly
known as petrol) are outside the purview of ITC.
Thus,
credit of special excise duty is not allowable under GST.
2.
As per section 16(2)
every registered taxable person shall be entitled to credit on provisional basis
only when following conditions are satisfied.
(a)
He is in possession of a tax invoice or debit note issued by a supplier
registered under this Act, or such other taxpaying document(s) as may be
prescribed;
(b) He has received the goods and/or services;
Credit is
finally eligible after matching when the following other conditioned are also
fulfilled.
(c) the tax
charged in respect of such supply has been actually paid to the account of the Government account, either in cash or through utilization of input tax
credit admissible in respect of the said supply; and
(d) he has furnished the return
under section 39
Thus,
in view of above provisions credit is allowed provisionally in E-credit ledger
up to Rs. 35000 of CGST and Rs. 35000 of SGST for which ABC Ltd has received invoice.
3.
On
inter-state inward supply of services credit of IGST is available.
4.
Section
16(1) provides for credit of all input, capital goods, and Input Services when
used or intended to be used in the course or furtherance of business.
Definition of
capital goods under section 2(19) specifies that “capital goods” means goods, the value
of which is capitalised in the books of account of the person claiming the input
tax credit and which are used or intended to be used in the course or
furtherance of business;
Thus,
under GST, full credit of capital goods as used for business is available at the
time of receipt of such goods.
5.
Pre
condition for eligibility of credit is used or intended to be used in the course
or furtherance of business. There is no such condition that capital goods must
be used in factory.
Thus credit on
AC is available when used for business.
6.
Section
17(5) clause (a) provides that credit on Motor vehicle and other conveyance shall
not be available under GST except when used for specified services mentioned in
sub clauses.
Sub
clause (ii) of section 17(5) (a) also provides that credit of motor
vehicle/conveyance will be available when used for transportation of goods.
It means credit can be available when vehicles used for transportation of
own goods by purchasing their own vehicle in business.