Transition To GST (Goods and Service Tax):- GST (Goods and Service Tax) Consolidates Multiple Taxes Into One. Here we provide information about the Input Tax Credit, Refund and Arrears and Other Cases like Job Work, Input Service Distributor, and Composition Scheme.
Input Tax Credit
- The Credit Invoice available if the Returns for the Last 6 Months Means From January 2020 to June 2020 were filed in the Previous Regime.
- Form TRAN 1 we need to file by 27th December 2020 to Carry Forward the Input Credit. TRAN 1 Can be rectified only once.
Credit on Capital Goods
Before GST will be only a part of the Input Tax paid on capital goods Could be taken as credit.
For Example, ITC on a Capital Good Purchased in the year 2020- 21 in Rs 10,000.
50 % Rs 5000 can be claimed in the next year.
In such cases, There Could be some amount of un unlisted credit.
Available on the Capital Goods. This Credit will be C/F to the GST by Entering the details in the Form TRAN 1.
Transition to GST Transitional Provisions
Credit on Stock
A Commodity Manufacturer or Service Provider who has goods lying in the Closing Stock on which been paid can also take the credit of the scheme. The Dealer needs to provide information about the Closing Stock of GST Portal.
The Dealer needs the Invoices for Claiming this Credit. Invoices should be less than 1 year old.
What Happens If You Don’t Have Invoices?
Manufacturers or Service Providers who not have an Invoice Evidence For Payment of Duty
The Stock Should be Identifiable separately.
The Credit Can be Taken by the Trader only if the Benefit of the Same is passed on to the Final Consumer.
How Credit will be recognized in case of the Number of Invoices?
|The rate of the GST on Goods and Services||Intra State Transactions – Credit To CGST||Inter-State – Credit to IGST|
|18 % or More||60 %||30 %|
|Less than 18%||40%||20 %|
Registered Persons under the Previous Taxation System
- A registered dealer and Unregistered Under Previous Law.
- Who was dealing with the Manufacture of Exempted Goods and Services of Provision of Exempted Services?
- Providing works Contract Service and was Availing the Abatement.
- First and Second Stage dealer.
- Tax Payer of Registered Importer.
Enjoy the ITC of Stock who held the Input Stock On 1st July. They need to follow the following Conditions.
- Inputs or Goods are used for the Making of the Taxable Supplies.
- Here we provide the benefit is passed on by way of Reduced prices to the Recipient.
- A taxable person is eligible For the Input Tax Credit on such Inputs.
The Person is in possession of Invoices Evidencing Payment of Duty Under the Earlier the Law.
- All the Invoices should not be older than 12 months.
- The Suppliers of Services is not eligible for any abatement under the GST.
Input Tax Credit ITC Goods Sent Before 1st July
If the Manufacturer/dealer Receives the Goods For Claiming the Input Tax Credit. The Tax on which has already been paid under the previous Law. The Tax Credits were only available only the Invoice or tax-paying Documents are recorded in the accounts person within 1st August 2020. At last 30 days of the Extension will be granted by the Competent Authority on grounds of Sufficient cause for delay.
Refunds and Arrears
If any claims or Appeals regarding the CENVAT Credit, Tax or Interest ….etc are refunded on the Due Amount before 1st July shall be disposed of them according to the Previous Laws.
Job Work For GST Tax:-
No Tax shall be imposed on the Parable of the Inputs on Semi Finished goods removed for the Job work For carrying certain processes and returned on or after 1st July.
- Causes When there is no tax Payable.
- Goods are returned to the Factory within 6 Months From the 1st July ( Extendable For a Maximum Period of 2 Months).
- Commodity held by job worker is declared in the Form TRANS-1.
- Supply of Semi-Finished Goods is Done only on payment of tax in India or the Goods are Exported out of India within 6 Months From the 1st of July.
- GST is not applicable if the Finished Goods were Removed Before on 1st July For Carrying certain processes and are Returned within 6 Months from the 1st July Month.
- ITC Input Tax Credit will be recovered if the Commodities are not returned within the Time period of 6 months.
Credit Distribution By Input Service Distributor
When the Tax Payer is registered under the Composition scheme previously but is a normal taxpayer under GST. Can Claim the Inputs of Credit available as on 1st July by satisfying the Certain Conditions.