GST INDIA DAILY

INPUT TAX CREDIT SERIES – PART 10

Last week we have gone through manner of claiming GST. Read the Part 9 of ITC under GST. Please go through the link below

https://wordpress.com/read/blogs/170704436/posts/684

Actual Receipt of Goods:

A registered person shall be entitled to the credit of input tax only if

1. He is in possession of tax invoice issued by the supplier
2. He has received goods or services or both

Say, Mr. Raju has purchased goods in the on 20.09.2020 whereas he has received the goods in the month of October. He cannot avail ITC on the above purchase in the month of September as he has not received goods and the same can be availed in October month.

 Deemed Receipt of Goods or Services (Bill to Ship to Model)

1. Where the goods are delivered by the supplier to the recipient or any other person on the direction of the recipient, whether acting as agent or otherwise, before or during the movement of goods
2. Where the services are provided by supplier to any person on the direction of and on account of such registered person

Mr. Raju is a trader who places an order on Mr. Sampath for consignment of Apples. In the meantime, Mr. Raju receives a buying order from Johny for the same quantity of apples. Raju instructs Sampath to deliver the goods to Johny and he delivers accordingly. In this case, though the goods are not physically received at the premises of Raju, he will be entitled to ITC on the consignment as per the above explanation.

Can a person take ITC without payment of consideration for the supply?

The recipient can take ITC on receipt of taxable supply of goods. However, he is required to pay the consideration along with the tax within 180 days from the date of issue of invoice.

Where a recipient fail to pay to the supplier within 180 days from the date of invoice, then the amount equal to input tax credit availed by recipient shall be added towards its output tax liability along with interest in the month immediately after expiry of 180 days.

Mr. Balu a registered supplier made a supply of goods worth ₹1,68,000 inclusive of IGST ₹18,000 to Mr. Charan on 14.12.2017. Mr. Charan has failed to make the payment within 180 days i.e. before 12.06.2018 but he has availed ITC on 15.01.2018. Therefore, input tax credit of ₹18,000 shall be added towards output tax liability along with interest for the month of June 2018.

Interest shall be calculated from the date of taking credit i.e. 15.01.2018 till the date of payment of reversal of credit.

Time Limit for Availing ITC

ITC on invoices pertaining to a financial year can be availed anytime till the due date of filing of the return for the month of September of the succeeding financial year or the date of filing of the relevant annual return, whichever is earlier.

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MANIMARAN KATHIRESAN ( ON BEHALF OF GST INDIA DAILY )