Eligibility of Input Tax Credit
- All goods or services
- Used or intended to be used
- In the course or furtherance of business
Goods and Services on which Credit is not Allowed
(a) motor vehicles, except when they are supplied in the usual course of business or are used for providing the following taxable services—
- transportation of passengers, or
- transportation of goods, or
- imparting training on motor driving skills;
(b) goods and / or services provided in relation to food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, membership of a club, health and fitness centre, life insurance, health insurance and travel benefits extended to employees on vacation such as leave or home travel concession, when such goods and/or services are used primarily for personal use or consumption of any employee;
(c) goods and/or services acquired by the principal in the execution of works contract when such contract results in construction of immovable property, other than plant and machinery;
(d) goods acquired by a principal, the property in which is not transferred (whether as goods or in some other form) to any other person, which are used in the construction of immovable property, other than plant and machinery;
(e) goods and/or services on which tax has been paid under section 8; and
(f) goods and/or services used for private or personal consumption, to the extent they are so consumed.
Conditions For Claiming Input Tax Credit
- Possession of a tax invoice, debit note, supplementary invoice or such other taxpaying document
- He has received the goods and/or services
- The tax charged in respect of such supply has been actually paid
- He has furnished the return under section 27
Time Limit for Claiming Input Tax Credit Under GST
Credit for an invoice pertaining to a FY cannot be claimed after:
- Filing of the return for the month of September following the end of FY or
- Filing of the annual return of the FY; whichever is earlier (effectively 20th Oct)
Utilization of Input Tax Credit Under GST
Utilization of CGST Credit
As per the proposed law, CGST credit has to be first utilized against CGST liability and if the balance is available, same can be utilized against IGST.
Utilization of SGST
SGST has to be first utilized against SGST liability and if the balance is available, same can be utilized against IGST.
Utilization of IGST
IGST has to be first utilized against IGST liability and if the balance is available, same can be utilized against CGST and if still the balance is available same can be utilized against SGST. Hence IGST is like a joker in a pack of cards which can be used as any card.