Input tax credit ITC

Sec 16 to 18 Rules
s theory Practical
very simple
5 marks

If conditions
for availing ITC
17 Restrictions on ITC 21 Blocked ITC
18 Ftc in special cases
49 manner of utilization of Itc

Rule 86A Restriction in utilization of Itc

a go

see 16 s Availability of Itc

Every registered person
can claim Input tax credit of any tax paid by him
s on ANY Goods or services of both Input ca services
which are used or Intended to be used
in furtherance business ie
course
of COB FOB

Sec 16221 conditions for availing ITC

9 Person is in possession of Tax Invoice or Debit

note or any other prescribed documents Rule36

Prescribed Documents Rule 363

 I Tat Invoice issued by supplies
2 Debit note

Mr A Goods sold Ms B
supplier original Price 210000 Recipient
Revised price 21.10.00
Tax Invoice option 2 cancel original
valve 10000 Invoice a issue
Revised Invoice
GST 1800

option 2 Issue Dr note

if
I I
B's AK D8 1 78 ow B's Alc Dr 210 ow
To sales 1000W To sales 10.00
To GST 18,00 To GST 1.800

Debit note
B got it
HI get At t
D8 rate 1 Yoke

Value 210,000
Use 1800

3
Self Generated Tax Invoice by recipient in case
eat is paid under Rem

ee Director Invoice 10000

company
I 95
184
 957 18
Em use
218k
gout

4 Bill of Entry In care Last paid on Imported

BOE Goods
Deemed Inter state supply
examfy Goods gutposted INDIA

value 100 l
Basic w m.my to In
1201
value for Levy of Last
Case joy god187
zÉ on the basis of Boe

it will form part

of value for
Levy of IGST see 15 2 a

5 Input Service Distributor's Invoice

Ho MP unavailed ITC
distributed
I t
132 I Bt 2 Bo 3 Inioice
OPS Cmte egg
Sec 16 2 conditions for availing ITC

al Recipient possess Tax onvoice Do note or

any
other prescribed Document Discussed

991 supplier has submitted Details

of such supplies
in his Gser I or through IFF Invoice Furnishing
Facilities

communicated such Details to recipient

b person has received Goods or services

Goods received to agent Job worker Customer
directy from supplies Direction
on
of recipient
will be deemed to be received by recipient

ba the detail of Itc woot supplies communicated

to such recapient Uls 38 has NOT BEEN
RESTRICTED CAmendment

s
sale
I If _gout

d Recipient has filed his Gser 3 B ie Return

 075 39

Note Goods received in Lots Installments

LastProviso to see 161
Against single Invoice
H
Itc will be available in respect of all goods
on receipt of Last Lot Installment

see 16153 NO Depreciation claimed on

Itc
if
Gse component of capital goods Pam

9 Aunt paid for Pam 100 on

again
i
see rule bendit

Net payable I Depot

PZLEPGBPJI.lk
whole life

sti
eat saving430 mas
claim 27C eat saved 5400
 Roud I
I I
outwardsupply summary of
sale Salek Purchase
H H

statement
ofoutward I reflected in GSR 2B GSTR 3B
Supply us 37 GSTR uts38 on the basis of Return 015393
02 IFF sale uploadedby our
Monthly supplies in his Gsers output tax xx
I 02 through IFF El Itc Xxl
output tax liability
Gsecollected on sale Do credited
I
T I I
E Liability Register E credit Ledger E cash Ledger

mistimed
Inward supply
Automated K
 16147 maximum time limit to claim ITC
Hs
231 274 25

i IjÉÉ ran
2
34th

purchase
Ice Max Itc
iinsst.dz
Dr note issued EMEIFyr
I 30th at LTC Benoit7

meet time Limit to claim 27C in respect of any

In voice or Debit note t

30th Now
9
of next F Yr
Earlier M which Invoice or Debit note is issued
or
b ANNUAL RETURN
actual Date
of Filing of
Noted Due Date
of Annual Return 325 Dec of
Next F yr

Proviso to see 16121 Reversal of Iec on non payment

of consideration Gse within 180 Days

1 06
s 180 Days
clusideration
y my
purchase
Invoice 1 063 with Gse paidconsideration
with Gst
value 2 10.0.00 not paid I
 Gst 18.0h to supplies Re avail Lick
I wholly partly Out Refund
Id I NOT

proportionate ITC note Time Imit

Reversed Pay
ofavailing Iec
UPS 16247 shall
Interest us 50 not Apply in
re availment

of Eec

Interest period e
ITC
From Date
of availing
fill Date when Itc so reversed is paid
with Gser 3B

Sec 17 Restriction in LTC 2 Blocked credit

t t t t
17 1763 1764 1765
s
1741
Ital's 213,519
BusinessPurpose Blocked
Taxablesupply
credits
personalpurpose
I exemptsupply
2 25 CG
PROPORTIONATE ITC

not
 Sec 17 Cst Blocked credit

17251 191 motor vehicle meant to carry persons

motor vehicle
I
to tarry Persons others
I
I at s goods carriage
513 12 2 E 13 12th cash Delivery VAN
It
t
Itc t
ed e
s Bus Ts used for specified other
for use
of Ee purpose
It

I as 527 NOEL
2 Transportation
of stBmw
passenger for Director
3 7 Seater car for
3
Driving school
Transport of Ee
LTC K

99 Aircraft or vessels

I I

2 Transport of person I Transportation of

I Goods
I 1 I
 ITC K
specified use other use

No LTC
I Held for further supply
ie SIT
2 Transportation of
passenger
3 navigation
4
Training
Flying
IIc a

ab Insurance services servicing 208 Repair a

maintenance services

I I
m respect of services received other
motor vehicles by vehicles
I
offered in clause a manufacturer
a Caat Carluessell of such Mov
Aircraft Tata Insurance k
ex
I t
had 13
seater sFIurance
used for specified other
purpose
use b Reinsurance oftruck
Leg SIT Transport Driving services by s ram of
Business w
Is seater
I Musante EE bus
Jtc Availed Easton Insurance 270
Premium t
ofDirector's
 car

example of Re Insurance

as.tt nn ma
Wm
21500
s seater

8 sick taste lot

I 2700 1 23600 g

output tax 3600

E Etc 6701
Net ast payable 901

b i supply of Goods service by way

or
of
Food beverages
s outdoor catering if ER Bank secy

Health services
Cosmetic plasticsurgery
Beauty Treatment
Itc x

É
Renting Leasing of mu covered in clause Caa

Health Insurance
Gse paid see X
Life Insurance exp Allowed in PGBP
with Gse
proviso

É
IÉÉ
an
caterer function

value 2 200 ow
2 1 50 no
age no zone II 23
Gse 2700

27421
4
Allowed

eat
catering ABI 8s Mr A
Inward out'ward
caterer go
supply
gg
r

Gse paid

III a

DCI meber ship of club Health fitness centre

ER Gym
Gym
Fey for J
ee Stax
b Ciii Leave travel benefits extending to employee
Lee ticker of Ee a se paid on

tickets x

Proviso to b ii a blini
 Iec will be available if provision of these
goods or services by ER to Ee is mandatory
under any Law

17 5 Sd di work contract Goods or services

Matt service or mat or services

I t

For Construction For Repaira maintenance

expenses capitalised Expenses PELT

I It
Immovable PRM Imm Pem
Property its foundation Property
structural support
Y I
ITC ITC X ITC K
X H
ITC E
Here
construction Includes reconstruction renovation
alteration addition or repairs to the
extent capitalised

Repair chargedto Pal not construction

IT C E

Pam Equipment machinery etc foundation

I structural support
Ed I
 Tele Towers construction
Pipeline outside
Repair a maintenance
I III
Factory premises

Y compact services
for contruction of
s office no

S Factory no
Residence EE No
for
Road garden No

foundation for Pam

Pipe Line Insidefactory yes

2 Repair of office building charged to Pat Yes

3 Repair to Pam charged to PRL Yes
No
4 Repair to factory capitalised I
5 Repair to Pam capitalised I Yes

É services on which Gse is paid under Seco

ie under composition scheme

f NRI composted goods ITC K

purchasedfrom India ITC X

5 Personal consumption Itc x

4 Goods s Lost Destroyed Distributed as tree sample

Gifted Donated or written off to Iec x

 Sec 1747 Rule 38 ITC to banks IN BFC FL

outward
Banks FL NBFC
a
Is supply
Partly Taxable
Eg Foreign Exchange
Serviceto Public BE
Agency service
Loan ProcessingFeed

Input Is ca PartlyExempt
I E Loans Advances
Proportionate Itc Justest Discount

I Foreign exchange
to OtherBanks AD
acidEroportionate
IT in manner
HIII see
balance 507 Lapse
015 1761

Note I
option once exercised can not be withdrawn within
I year

Note Restriction of 50 Iet not applicable on Input

services taken from DDP
ie two Brand with Rey No undersame PANT
 sectics common Inputs used partly for Business
purpose partly for Personal purpose

ee Tailor i
Export GST X
ERS z guy
market
Normal
cloth Is
ETC v
Drg Gsp a
For sale taxable
common
guts Inputs personal use
apex
Iec x Dress Non Business
Thread Button purpose

go machinery Army
ITC X It uniform ÉÉmpt
IT exemptsupply

proportionate
PANT
01s 176 776

Secta common Inputs used partly for making

Taxable supply including 21253 A party
Fox making exempt supply
Ers zero rated supply ie
Export or
Deemed export i.e Supply to SEZ
I

Input used It available Exemptsupply

Refund of Iec quaggy NEI.ec
 Section I
H
t t t t t t

see 186 Sec1861 Sec18131 Sec 18 4 1815 18161

H H
LTC Available Time Limit TIFof Itc reversal manner Reversal

in special to avail see in careof of Itc in ofReversal Ofac

cases in case of elf of special on sale
cases
18 G Ca Cb a Sec 18 2 Business ofcapital
d Rule 40 Rule 41 Rule 443 Goods
PRM

see 18121191 Iec in case

of new registration

2 06 and
unregistered np5l07
I Downing.ie
9 Appin
ForReg
Reg
Granted
purchase
safe peg
zikxas
E_Ee.EEte.E
L Repospective Date
1
stock on 31stmay
Rm xx outward supply
Inputs we xx Invoice Revised Invoice
EG xx within 2month of
y grant of Registration
ITC Ami IA
Invoice IT VE
so that your Recipient can
claim LTC
I
 Raised upload with first return

IIII
UIS 40

s when a person liable for Registration under ase

s has Applied for Reg within 30 Days

of becoming liable a
has been granted registration
H
then he shall be allowed to take It
In INPUTS 25 ca held as
respect of
Inputs RM
Wz p
FG
on the immediately preceding the date of
date
becoming liable for Reg Cie effective date of Reg

note no Iec of CGI Is acquired before registration

see to it let Iec in case

of voluntary registration

15018 2110 08

4 A
AppIn Reg
For Reg Granted
effective
DateofReg
 Inputs on 27108
as RM
WIP ETC E

FG Invoice Eliot airet

Sec I 11 IM Omosition Dealt RegularReg

see lg ca ca Exempt supply s taxable supply

it 1 Regular Reg
exempt n
taiassippy
mummmunot
I
T 3
212s a
YEE
ITC X ast X to

Yn
ftp.mywan ra3 Ltc t
Based on Invoice
s capital Goods Pam proportionate
Lec available

5 IS Itc x Rule 407

Rule 40 Itc
manner of calculation of Proportionate
on capital goods in case of see 1841cal id

Total GST paid on capital Goods x

 5 per quarter Part of the Q IN
From date
Of Invoice
t.ec available
Here quarter means
I Jan Feb March
92 April May June Sto Fixed E
Q3 July Aug 5M
94 Oct Nov Dec

Ele Mx A was registered under composition scheme

015 10 Until 20th Oct 2023
From 10th oct he got Registered under regular
scheme u s 9
Detail of Pam
cost 10000
of pam
Gse paid 18.00
Date Invoice 25th March 23
of ITC
calculate Available
solution
ITC Available on CG 01s 1812 i Rule 40

Total Gst paid on capital Goods Ee ow

5 per qtr part of the Gtx
or

57 X 4Qtr
É
18,00
Available see I
wn No of Quarter
25 03 32103 Q2
2 04 30 06 Q2
 2107 30109 03
2 20 94
409 20

Sec 18127 time limit to avail 27C in care of

Sec 18 s Ca Cbl c Cdl

No LTC 015 1862 a cc Cdl can be availed

b
2 YEAR from DATE OF INVOICE
after expiry of

Sec 1814 Reversal of Itc in following cases

Regular Reg composition scheme
Rule 44 Taxable supply Exempt supply
Registered s Reg cancelled

teeth fittest
Taxable supply y exempt supply

I
time 16th
Sept
Itc Ayat eh
x
1501
Inputs rm WIP CG Lec reverse
knife Estimated

Capital Goods proportionate 27C

Reversed Rule 44
Is No reversal
Rule 44 Reversal of LTC Uls 1814

Gse paid on capital Goods Pam xx

A proportionate ITC for no

of months xxl
part of mouths from Date of Invoice
taking 60 mouths life of CG
NO Ofmonthsfrom Invoice
Total Gst x
60 months

LTC to be reversed E

T.tk as making taxable supply till 9th Oct From

2023
20th Oct his supply becomes exempt
Detail of PKM
cost 50000
use paid 18
Invoice Date 2 04 2023
calculate Itc to be reversed

to be reversed us 18 4 Rule 44

Total ast paid on Pam 290.000

A Proportionate ITC 1220,5001
2 90 ow x 7 mouths 60 months
 27C to be reversed 779.5 00

Analysis of Rule 40 Rule 44

composition sch Regular Compo scheme

exempt supply taxable exempt supply

Sec 1814calid Sec Ikea

It

cos Itc ramit Ca Lic reversal EH

I
Total Gst paid xx total Gst paid xx

ft 5 per Quarter a proportionate

part of Qtr from xx Ltc on monthly
Basis
Invoice Date I
ITC Available 27C Reversal I
 Sec 181.61 Reversal of ITC on capital Goods Pam
11
when a capital asset sold after utilizing its
pam is
Itc Following amount will be payable at time of
sale Disposal

I Gse paid on such Pem xx

5 per quarter past of Q

RP AT
f from date of Invoice
ITC Reversal I
am

2 Transaction value x GST Rate II

Higher II
SH GST JAM UH If Itc utilized

Note In case
of scrap sale of moulds dies Jigs
Fixtures refactories items

No need to Reverse IT Pay as only on

Transaction value

Édf Acquisition Invoice

sale
of Pam 16 0612022
10 10 2023
Date of
957 paid on purchase 1 80
cost 1015 ow

calculate the Gse payable on sale of Pam if

care I sale consideration 2300000
 case I Z gooooo
Gse rate on disposal 18
solution
Tat to be paid on sale of Pam
case I SC 2300000 case Sc 2900000

1 Gse paid on Acg 1,80 ow 2 Gst paid on Acg 1.80 ow

C Sj per a Part 6300 C 51 per Q Part 6300

1 go.mx six 791
p En
21 72s Value x 18 0 2 72s value x 181 1.62.00
30000 X 181 goooo x 187

62
Higher E Higher

Rule 816A restriction on utilization of ITC

If Commissioner or Any other Authorised officer not

below the rank of Assistant Commission

s has reason to believe that The Iec to be claimed

by registered per is being claimed fraudulently or is
Ineligible

canrestrict prohibit the utilization of Itc in following

grounds
 2 Zec is being claim on such Invoices Documents
s whose supplies is not existent
Does not make taxable supply from
Registered place of business
s
against which goods services are not
deceived by recipient
Tax has not been deposited to Gout

2 Registered person claiming Iec

does not exist
Does not make supply from Reg Place

31 Not in possession of tax Invoice other documents

Period Max I year

of Restriction
withdrawal of Restrictions commissioner Authorised
person can withdraw restriction if so satisfied

Rule 86 B Restriction on utilization

of whole Iec

91
Applicability Applicable on a Registered person
value
of taxable supply in a month s Sol
excluding Exempt 2k supply

b Restriction RP can utilize his her Itc only to pay

99 of output Tax Liability
 Balance 1 of output tax liability shall
be payable in cash ie by e cash Ledger

Example June mouth T lo s 8017

Gse on outward supply 18 14.401
of Eoe
Iec available given I 201
cow
output tax 14.40.00

I
payment through paytent through
I TC E 6th Ledger
14.401 xggy 14 l X 27
14 25 600 14,400

Exons
21 RP has paid s 20000 as Income tax in each of
2 preceding P yrs whose due dates have expired
in C yo

9 Yo 20

t t
42
finite
Income Tax S Il S Il X Rule GB NA

2 Refund of unutilized Iec in P F yo sooooo

I Rebind Last year

RMTzeso rated
supply export Deemed Export
 sale to SE 2

S Inverted Duty structure CA FINAL

concept of IDs
Est Ry shirt sold
Z 100 2 200
g
957 12 Gst 5
IT a to

output tax 20
H Input Tax 212
sec Refund us 54

3 Payment
of 31
of output tax liability by E cash
Ledger upto Last month of C yr

Rule 8GB Not Applicable on C can utilize ITC for 1001 on

1 Gout Departments
2 Local Authority
3 Public sector undertaking PSU
4 statutory Bodies
Sec 2813 Transfer of Itc on transfer of Business
readwith Rule42
 utilization ITC Sec 49
manner
of of
output tax LAST CAST SUSTIUTGST

Input tax credit I

ITC
295T K K K often

cast s E W X

sa se s x x x

Notes
11 ITC
ofIAST should be utilized first for output tax
liability IG St
of
2 Balance Iast credit can be utilized for cast or

Sastlutgst payable in ANY ORDER

3 ITC
of case or sase can not be utilized unless
ITC
of Iast is
fully utilized even for payment

of case 02 sus t
to do Last of credit acted I case Sase
pay 924th fat get case sase at Iec used one

FAT
4 ITC of case Sase should first be utilized
for payment of case sase a then balance
ITC for Last in the Absence of Itc of Iast
 5 For payment utilize the Iec in this
of Iast
order it Last in case I sast
I
ie ate of sase can not be utilized for payment
is utilized
of Iast unless Lee of case
fully

examples
oh Last cast sage
z 10000 Soro Goro

2957 16000 1000 zoo 300

sooo 1000 in Anyorder
400 2000

examine

gj
case
21 220.00 First of all utilize
Iast 1.500 the Itc of Last
4504

example
gym Ifor
a

unfastens
Exampled
Iast
250 Ow

te so ow
4dg
131
Cast 25100

Sase 30.00
1211