ITC ( INCL.

TRANSITIONAL PROVISIONS),
ISD,
CROSS UTILIZATION OF IGST
&
FUND TRANSFER

CA. UPENDER GUPTA, IRS

COMMISSIONER (GST)
CBEC, GOI
upender.gupta@nic.in
1
 PRESENTATION PLAN
 INPUT TAX CREDIT (ITC): LEGAL PROVISIONS
 ITC: CONCEPTS
 WHO IS ELIGIBLE FOR ITC
 FEATURES OF ITC PROVISIONS
 TRANSITIONAL PROVISIONS RELATING TO ITC
 INPUT SERVICE DISTRIBUTOR (ISD)
 FEATURES OF ISD PROVISIONS
 CROSS UTILIZATION AND FUND TRANSFER

2
 ITC LEGAL PROVISIONS.…
 Definitions:
 Section 2(5): Agent
 Section 2 (20): Capital goods
 Section 2 (41): Electronic credit ledger
 Section 2 (54): Inputs
 Section 2 (55): Input services
 Section 2 (57) / 2(1)(d) of IGST Act: Input tax
 Section 2 (58) / 2(1)(e) of IGST Act: Input Tax Credit
(ITC)
 Section 2 (61): Inward supply
 Section 2 (72) / 2(1)(g) of IGST Act: Output tax
 Section 2 (73): Outward supply
3
 ….ITC LEGAL PROVISIONS….
 Definitions:
 Section 2 (75): Place of business
 Section 2(77): Principal
 Section 2 (85): Reverse charge
 Section 2 (92) r/w section 3: Supply
 Section 2 (106) r/w section 27(3): Valid return
 Section 8: Composition Levy
 Section 16: Manner of taking ITC
 Section 19(3): Voluntary Registration
 Section 25, 26 & 27: Return
 Section 28: Claim of ITC & provisional acceptance thereof
 Section 29: Matching, reversal & reclaim of ITC
4
 ….ITC LEGAL PROVISIONS….
 Section 35 (2) / 7 (2) of IGST Act: Credit of self-assessed ITC
in electronic credit ledger
 Section 35 (4) / 7 (4) of IGST Act: Utilisation of ITC
 Section 35 (5) / 7(5) of IGST Act: Cross – utilisation of ITC
 Section 38 (2): Refund of unutilised ITC
 Transitional provisions:
 Section 143: Transfer of credit carried forward in return
 Section 144: Transfer of unavailed credit of capital goods
not carried forward in return
 Section 145: Transfer of credit of eligible duties and taxes
in certain situations

5
 ….ITC LEGAL PROVISIONS
 Transitional provisions:
 Section 146: Transfer of credit of eligible duties and taxes
for a person switching over from composition to normal
scheme
 Section 147: Reversal of credit while switching over to
composition from normal scheme
 Section 155: Claim of credit to be disposed of under the
earlier law
 Section 162A: Credit of tax paid on goods lying with
agents
 Section 162B: Credit of tax paid on capital goods lying
with agents
6
 INPUT TAX CREDIT: CONCEPTS….
 Input tax credit means credit of input tax - section 2 (58)
 Input tax means - section 2 (57):
 Basket of CGST & IGST under CGST Act
 Basket of SGST & IGST under SGST Act
 Basket of CGST, SGST & IGST under section 2(1) (d) of
IGST Act
 Tax charged on supply of goods and / or services used or
intended to be used
 in the course of business
 in furtherance of business
 Includes tax paid on reverse charge basis under section
7(3)
7
 ….INPUT TAX CREDIT: CONCEPTS….
 Input means - section 2 (54):
 any goods (subject to certain exceptions) other than capital
goods
 used or intended to be used by supplier
 for making an outward supply in the course or furtherance of
business
 Capital goods specified in section 2 (20)
 Input services means - section 2 (55):
 any services (subject to certain exceptions)
 used or intended to be used by supplier
 for making an outward supply in the course or furtherance of
business
 Exceptions (Negative list) - section 16(9)
8
….INPUT TAX CREDIT: CONCEPTS….
 Electronic credit ledger means ITC ledger in electronic form
maintained at GSTN - section 2 (41)
 Inward supply means receipt of goods and / or services whether by
purchase, acquisition or any other means and whether or not for
consideration – section 2 (61)
 Output tax means CGST / SGST chargeable on taxable supply of
goods and / or services made by him or by his agent and excludes
tax payable on reverse charge basis – section 2 (72) / IGST
chargeable – section 2(1)(g) of IGST Act
 Outward supply means supply of goods and / or services whether
by sale, transfer, barter, exchange, licence, rental, lease or disposal
made or agreed to be made in the course or furtherance of business
except such supplies where tax is payable on reverse charge basis –
section 2 (73)
9
 ….INPUT TAX CREDIT: CONCEPTS
 Place of Business includes a place from where the business is
ordinarily carried on and includes a warehouse, a godown or any
other place where a taxable person stores his goods, provides or
receives goods and / or services or where he maintains his books of
accounts or where he is engaged in business through an agent -
section 2 (75)
 Reverse charge means the liability to pay tax by the recipient
instead of the supplier in respect of such categories of supplies as
notified under section 7(3) – section 2 (85)
 Supply means the supply as per section 3 – section 2(92)
 Valid return means return filed with payment of full tax as self
assessed as per the said return – section 2 (106) r/w section 27(3)

10
 WHO IS ELIGIBLE FOR ITC
 Every registered taxable person - section 16(1)
 A person who has applied for registration within 30 days of becoming
liable for registration - section 16(2):
 entitled to ITC of input tax in respect of goods held in stock* (inputs as such
and inputs contained in semi-finished or finished goods) held in stock on the
day immediately preceding the date from which he becomes liable to pay tax
 A person who has taken voluntary registration u/s 19(3) - section
16(2A):
 entitled to ITC of input tax in respect of goods held in stock* on the day
immediately preceding the date of registration
 A person switching over to normal scheme from composition scheme u/s
8 - section 16(3):
 entitled to ITC of input tax in respect of goods held in stock* on the day
immediately preceding the date from which he becomes liable to pay tax as
normal taxpayer
11
 FEATURES OF ITC PROVISIONS….
Full ITC allowed on capital goods in one go
ITC of input tax paid on goods and / or services used for
making taxable supplies by a taxable person allowed subject
to fulfillment of four conditions – section 16(11):
 he should be in possession of tax paying document issued by a
supplier;
 he has received the goods and / or services;
 the tax charged on such supply has been actually paid to the
government;
 he has furnished the return
 ITCentitlement only on receipt of last lot of goods where
goods are received in lots / instalments – proviso to section
12
16(11)
 ….FEATURES OF ITC PROVISIONS….

 Normally the ITC would be admissible only when

the goods and / or services have been received by
the taxable person
 Explanation to section 16(11) provides for dealing
with “Bill to Ship to” Model:
 Taxable person would be deemed to have received the
goods where the goods are delivered by the supplier to a
recipient / any other person on the direction of such
taxable person, whether acting as an agent or otherwise,
before or during movement of goods, either by way of
transfer of documents of title to goods or otherwise 13
….FEATURES OF ITC PROVISIONS….

 Transfer of ITC permitted in case of change in

constitution due to sale, merger, amalgamation etc.
with specific provision for transfer of liabilities -
section 16 (8)
 No ITC on an invoice after the expiry of one year from
the date of issue of such invoice - section 16 (3A)
 NoITC beyond September of the following FY to which
invoice pertains or date of filing of annual return,
whichever is earlier - section 16 (15)
 No change in return is permitted after September of next FY or
filing of annual return whichever is earlier 14
….FEATURES OF ITC PROVISIONS….

 Proportionate ITC allowed:

 where goods and/or services are partly used for
business and non- business purposes - section 16 (5)
 where goods and/or services are partly used for
taxable and non-taxable (including exempt but
excluding zero-rated) supplies - section 16 (6)
 ITC not allowed, in case of capital goods, to the
extent depreciation is claimed on tax component
of capital goods under Income Tax Act - section
16 (10) 15
….FEATURES OF ITC PROVISIONS….

 Reversal / Payment of ITC on switching over from

normal to composition scheme or taxable goods
and / or services becoming exempt - section 16
(12)
 Reversal / Payment of ITC or payment of tax on TV,
whichever is higher, in case of supply of capital
goods on which ITC was availed - section 16 (14)
 Recovery of wrongly availed ITC – section 16(16)
r/w section 51

16
….FEATURES OF ITC PROVISIONS….

 ITC available only on provisional basis on the basis

of the return filed under section 27 – section 28
 ITC cannot be utilized by the recipient until a valid return
has been filed by him
 ITC allowed for a period of two months until
payment of tax and filing of valid return by the
supplier – section 29
 ITC to be confirmed only after matching of
supplier’s and recipient’s invoice details– section 29

17
….FEATURES OF ITC PROVISIONS….

 ITC as self assessed in return to be credited to electronic

credit ledger – section 35(2)/ 7(2) of IGST Act
 ITC can be used for making payment of tax only –
section 35(4) / 7(4) of IGST Act
 Manner of utilization of ITC – section 35(5) / 7(5) of
IGST Act:
 ITC of IGST can be utilized towards payment of IGST, CGST
and SGST in that order
 ITC of CGST can be utilized towards payment of CGST and
IGST in that order
 ITC of SGST can be utilized towards payment of SGST and IGST
in that order
 No cross-utilization of CGST and SGST credits 18
 ….FEATURES OF ITC PROVISIONS

 Unutilized ITC can be claimed as refund in

certain situations – section 38(2)
 in case of exports of goods and / or services except
where exported goods are subject to export duty
 in case where rate of tax on inputs is higher than
rate of tax on output
 In other cases, unutilized ITC to be carried
forward

19
 TRANSITIONAL PROVISIONS .…
ITC
carried forward in the last return furnished under earlier law
admissible as ITC in GST regime - section 143
 credit should have been admissible under the earlier law
 credit should be admissible under the present law
 credit so availed but found to be recoverable as a result of proceedings
under the earlier law – to be recovered under the present law

ITCon capital goods, not availed due to restrictions under earlier

law, admissible as ITC in GST regime - section 144
 credit should have been admissible under the earlier law
 credit should be admissible under the present law
 credit so availed but found to be recoverable as a result of proceedings
under the earlier law – to be recovered under the present law 20
 ….TRANSITIONAL PROVISIONS .…

Registered taxable person, who was not liable for registration

under earlier law or who was making exempted supplies but is
liable to tax under the present law, eligible to avail ITC of tax
paid on goods (inputs, inputs contained in semi-finished or
finished goods) held in stock - section 145
 goods are used for making taxable supplies under the present law
 he was eligible for taking ITC under earlier law but for not being liable for
registration or goods being exempt under earlier law
 he is eligible for ITC under the present law
 he is in possession of invoice, etc. not issued earlier than twelve months from
the appointed day
 credit so availed but found to be recoverable as a result of proceedings under
the earlier law – to be recovered under the present law 21
 ….TRANSITIONAL PROVISIONS ….

 A person paying tax under composition scheme under earlier

law eligible to take credit of taxes paid on goods (inputs,
inputs contained in semi-finished or finished goods) held in
stock while switching over to normal scheme under the
present law - section 146
 goods are used for making taxable supplies under the present law
 he was eligible for taking ITC under earlier law but for being a composition
taxpayer under earlier law
 he is not under composition scheme under the present law
 he is eligible for ITC under the present law
 he is in possession of invoice, etc. not issued earlier than twelve months from
the appointed day
 credit so availed but found to be recoverable as a result of proceedings under
the earlier law – to be recovered under the present law 22
 ….TRANSITIONAL PROVISIONS….
 A person paying tax under normal scheme under the earlier
law and switching over to composition scheme under GST shall
pay – section 147
 an amount equivalent to ITC taken on goods (inputs, inputs contained in
semi-finished or finished goods) held in stock
 balance of ITC, if any, shall lapse
 Every proceeding relating to refund claim of ITC under the
earlier law to be disposed of under the earlier law – section 155
 amount of credit found admissible - to be refunded in cash subject to
provisions of unjust enrichment & will not be admissible as ITC under
the present law
 amount of credit found recoverable – to be recovered as arrears of tax
under the present law & will not be admissible as ITC under the present
law
23
 ….TRANSITIONAL PROVISIONS
 Agent can take ITC of tax paid on goods or capital goods
belonging to principal but lying with him - section 162A &
162B:
 agent is a regsitered taxable peson under the present law
 both principal and agent declare the details of stock lying with agent
on the date immediately preceding the appointed day
 invoices for such goods had been issued not earlier than twelve
months from the appointed day
 principal has either reversed or not availed of ITC in respect of such
goods

24
INPUT SERVICE DISTRIBUTOR
(ISD)

25
 ISD LEGAL PROVISIONS

 Section 2 (56): ISD

 Section 17: Manner of distribution of credit by ISD
 Section 18: Manner of recovery of credit distributed
in excess by ISD
 Section 19 r/w clause (vii) of Para 5 of Schedule-III:
Liability to be registered
 Transitional Provisions:
 Section 143: Amount of credit carried forward in a return to be
allowed as ITC
 Section 162: Credit distribution of service tax by ISD (only in
CGST Act)
26
 INPUT SERVICE DISTRIBUTOR

 Input Service Distributor (ISD) means - section 2 (56)

 an office of supplier of goods and / or services
 which receives tax invoices towards receipt of input
services
 which issues a prescribed document to a supplier of
taxable goods and / or services having same PAN as
that of ISD
 for the purposes of distributing the credit of CGST,
SGST or IGST paid on said services
 ISD would be deemed to be a supplier of services for the
purposes of distributing the credit
27
 FEATURES OF ISD PROVISIONS.…
 Generally the supplier of goods and / or services are
eligible for exemption threshold which also grants them
exemption from requirement from obtaining
registration – Section 9 r/w Section 19
 Exemption threshold not applicable to ISD – ISD liable to
obtain registration without any threshold limit – Clause
(vii) of Para 5 of Schedule-III
 ISD would have to obtain fresh registration as they
would not be migrated – Proviso to Section 19(1)

28
 ….FEATURES OF ISD PROVISIONS.…
 ISD provision is required to transfer ITC on input services availed
in one office but the said services are actually used in different
units registered in different States or business verticals located in
a State
 ISD may distribute credit, if ISD & recipient are located in
different States, of – section 17(1)
 CGST as IGST
 IGST as IGST
 SGST as IGST
 ISD may distribute credit, if ISD & business verticals are located
in same State, of – section 17(2)
 CGST & IGST as CGST
 SGST & IGST as SGST
29
….FEATURES OF ISD PROVISIONS….

 Conditions for distribution of credit by ISD -

section 17(3)
 credit to be distributed under a prescribed document
 amount of credit to be distributed shall not exceed
credit available for distribution
 credit of tax paid on input service exclusively used by
a supplier should be distributed only to that supplier
 credit of tax paid on input services used by more than
one supplier should be distributed to all such
suppliers in the ratio of their turnover during the
relevant period 30
 ….FEATURES OF ISD PROVISIONS

 Relevant period:
 if all the recipients of credit have turnover in the FY preceding
the year during which credit is to be distributed – the said FY
 if some of recipients of credit do not have turnover in the FY
preceding the year during which credit is to be distributed –
the last quarter for which details of turnover of all recipients
are available preceding the month during which credit is to be
distributed
 Recovery from ISD in case of excess distribution by him
- section 18(1)
 Recovery from supplier (i.e. receipient of credit) in case
of inter se excess distribution by ISD - section 18(2)
31
 TRANSITIONAL PROVISIONS
ITC carried forward in the last return furnished under
earlier law admissible as ITC in GST regime - section 143
 credit should have been admissible under the earlier law
 credit should be admissible under the present law
 credit so availed but found to be recoverable as a result of proceedings
under the earlier law – to be recovered under the present law

ITCin respect of services received under the earlier law

can be distributed by ISD as credit under the present law
even if the invoices are received on or after the
appointed day - section 162

32
CROSS UTILIZATION OF IGST
&
FUND TRANSFER

33
CROSS UTILIZATION & FUND TRANSFER….

Relevant provisions – section 35(5) & 37A of MGL/ section 7(5), 9

& 10 of IGST Act
Section 37A of MGL
 ITC of CGST used for payment of IGST – CG to transfer amount so
utilised from CGST A/c to IGST A/c
 ITC of SGST used for payment of IGST – SG to transfer amount so
utilised from SGST A/c to IGST A/c
Section 9 of IGST Act
 ITC of IGST used for payment of CGST – CG to transfer amount so
utilised from IGST A/c to CGST A/c
 ITC of IGST used for payment of SGST – CG to transfer amount so
utilised from IGST A/c to SGST A/c
34
….CROSS UTILIZATION & FUND TRANSFER….

Section 10 of IGST Act

 Out of IGST paid on inter-state supplies, CGST portion to be
transferred from IGST A/c to CGST A/c by CG
 on B2C supplies or on supplies to a compounding taxpayer
 On B2B supplies where recepient is either not eligible for ITC or
do not avail ITC within specified time
 Out of IGST paid on import of goods and / or services, CGST
portion to be transferred from IGST A/c to CGST A/c by CG
 on B2C supplies or on supplies to a compounding taxpayer
 On B2B supplies where recepient is either not eligible for ITC or
do not avail ITC within specified time 35
….CROSS UTILIZATION & FUND TRANSFER....

Section 10 of IGST Act

 Balance amount in IGST A/c (IGST – CGST) to be transferred by
CG to the SGST A/c of the States where such supply has taken
place as per section 5 or 6 of IGST Act
 Apportionment of interest and penalty would also be done on
the basis of same formula as applied in case of transfer of tax
from IGST A/c to CGST A/c and SGST A/c
Information about cross utilisation between CGST / SGST
with IGST and that about payment of IGST in case of B2C
supplies, etc. would be available in the return to be filed
under section 25, 26 and 27
36
 ….CROSS UTILIZATION & FUND TRANSFER….

Balance in CGST A/c:

 CGST on intra-state supplies
 Add: Transfer from IGST on account of utilization of ITC of IGST
for payment of CGST liability
 Add: CGST component of IGST from inter-state / import
transactions on account of supply of goods and/or services:
 to an unregistered person
 to a compounding taxpayer
 to a registered taxable person not eligible for ITC
 to a registered taxable person who has not availed ITC
 Less: Transfer from CGST on account of utilization of ITC of CGST
for payment of IGST liability
37
 ….CROSS UTILIZATION & FUND TRANSFER….

Balance in SGST A/c:

 SGST on intra-state supplies
 Add: Transfer from IGST on account of utilization of ITC of IGST for
payment of SGST liability
 Add: SGST component of IGST (IGST less CGST) from inter-state /
import transactions on account of supply of goods and/or services:
 to an unregistered person
 to a compounding taxpayer
 to a registered taxable person not eligible for ITC
 to a registered taxable person who has not availed ITC
 Less: Transfer from SGST on account of utilization of ITC of SGST for
payment of IGST liability
38
 ….CROSS UTILIZATION & FUND TRANSFER

Balance in IGST A/c:

 Less: CGST & SGST (IGST less CGST) component of IGST
from inter-state / import transactions on account of
supply of goods and/or services:
 to an unregistered person
 to a compounding taxpayer
 to a registered taxable person not eligible for ITC
 to a registered taxable person who has not availed ITC
Balancein IGST A/c, if any, to be devolved to States
under Article 270
39
40
 ….CROSS UTILIZATION & FUND TRANSFER….

Balance in IGST A/c:

 IGST on inter-state supplies
 Add: Transfer from CGST on account of utilization of ITC
of CGST for payment of IGST liability
 Add: Transfer from SGST on account of utilization of ITC of
SGST for payment of IGST liability
 Less: Transfer from IGST on account of utilization of ITC of
IGST for payment of CGST liability
 Less: Transfer from IGST on account of utilization of ITC of
IGST for payment of SGST liability
41
 CAPITAL GOODS…..
 Capital goods means – section 2(20):
 the following goods, namely:-
 all goods falling within Chapter 82, 84, 85, 90, heading 6805,
grinding wheels and the like and parts thereof falling under
heading 6804 of the Schedule;
 pollution control equipment;
 components, spares and accessories of the goods specified above;
 moulds and dies, jigs and fixtures;
 refractories and refractory materials;
 tubes and pipes and fittings thereof;
 storage tank; and
 motor vehicles other than those falling under tariff headings 8702,
8703, 8704, 8711 & their chassis but including dumpers and
tippers
 
42
 ….CAPITAL GOODS….
 Capital goods means:
 used-
 at the place of business for supply of goods; or
 outside the place of business for generation of electricity for
captive use at the place of business; or
 for supply of services
o Capital goods can be used at the place of business in case of a
taxable person engaged in supply of goods
o Capital goods can be used anywhere in case of a taxable person
engaged in supply of services

 
43
 ….CAPITAL GOODS
 motor vehicle designed for transportation of goods including their
chassis registered in the name of the supplier of service, when used for
 supplying the service of renting of such motor vehicle; or
 transportation of inputs and capital goods used for supply of service; or
 supply of courier agency service

 motor vehicle designed to carry passengers including their chassis,

registered in the name of the supplier of service, when used for
supplying the service of-
 transportation of passengers; or
 renting of such motor vehicle; or
 imparting motor driving skills
 
 components, spares & accessories of motor vehicles which are capital
goods for the taxable person
44
GOODS / SERVICES NOT ELIGIBLE FOR ITC….

 ITC not available in respect of following:

 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
 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 center,
 life insurance,
 health insurance,
 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 45
….GOODS / SERVICES NOT ELIGIBLE FOR ITC

 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
 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
 goods and/or services on which tax has been paid under
compounding scheme (section 8)
 goods and/or services used for private or personal
consumption, to the extent they are so consumed
46
 PRESENT SCENARIO
( INTRA STATE TRADE OF GOODS) CENVAT = 10%
VAT = 10%
STATE TAX VAT = 13.31 VALUE ADDITION = 10%
VAT : 11
TOTAL = ITC = (12.10) ITC = INPUT TAX
RS.13.31 Cash = 1.21 CREDIT
(11+1.10+1.21)
VAT = 12.10
ITC = (11)
Cash = 1.10

INPUT CAR
A B DEALER C CONSUMER
MANUFACTURER MANUFACTURER

CENVAT = 11 Invoice Value = 121

ITC = (10) (-) ITC _Cenvat = 10 Invoice Value = 133.10
(-) ITC_VAT = 11 (-) ITC _VAT = 12.10
Cash = 1
CENTRAL Cost = 121
TAX TOTAL Cost = 100
= RS. 11
E = 10
CENVAT (10+1)

TAX INVOICE B
TAX INVOICE A COST = 100 TAX INVOICE C
VALUE = 100 VALUE = 110 COST = 121
CENVAT = 10 CENVAT = 11 VALUE = 133.10
VAT = 11 VAT = 12.10 VAT = 13.31
47
INVOICE VALUE = 121 INVOICE VALUE = 133.10 INVOICE VALUE = 146.41
 GST SCENARIO
(INTRA STATE TRADE OF GOODS) CGST = 10%
SGST = 10%
STATE TAX SGST = 12.10 VALUE ADDITION = 10%
TOTAL = ITC = (11) ITC = INPUT TAX CREDIT
SGSTS=10
RS.12.10 Cash = 1.10
(10+1+1.10)
SGST = 11
ITC = (10)
Cash= 1

INPUT CAR DEALER CONSUMER

MANUFACTURER A MANUFACTURER B C

Invoice Value = 120

CGST = 11 (-) ITC_CGST = 10
ITC = (10) (-) ITC_SGST
Invoice Value 10= 132
=
Cash = 1 CENTRAL TAX (-) ITC_CGST = 11
CGST = 12.10 Cost = 100 = 11
(-) ITC_SGST
TOTAL =
RS.12.10 ITC = (11) Cost = 110
E = 10
CGST
(10+1+1.10) Cash = 1.10
TAX INVOICE B TAX INVOICE C
TAX INVOICE A COST = 100 COST = 110
VALUE = 100 VALUE = 110 VALUE = 121
CGST = 10 CGST = 11 CGST = 12.10
SGST = 10 SGST = 11 SGST = 12.1048
INVOICE VALUE = 120 INVOICE VALUE = 132 INVOICE VALUE = 145.20
 PRESENT SCENARIO
( INTER STATE TRADE OF GOODS)
STATE TAX STATE TAX
VAT = 11 (X) (Y)
TOTAL = RS. 11 TOTAL =
(11+0) RS. 16.91
ENTRY VAT = 13.91 (13.91+3)

CST = 2.42 TAX= 3

ITC = (2.42)
Cash = 0

INPUT CAR
DEALER CONSUMER
MANUFACTURER A MANUFACTURER B C
Invoice Value = 121
(-) ITC CENVAT = 10
CENVAT = 11 (-) ITC VAT = 11__ CENVAT = 10%
ITC = (10) Cost = Invoice Value
100 = 123.42
VAT = 10%
(+) Entry Tax = 3___
Cash = 1 CST = 2%
Cost = 126.42
CENTRAL VALUE ADDITION = 10%
TAX TOTAL ITC = INPUT TAX
= Rs.11 CREDIT
E 10
CENVAT= (10+1)
TAX INVOICE B
TAX INVOICE A COST = 100 TAX INVOICE C
VALUE = 110 COST = 126.42
VALUE = 100
CENVAT = 11 VALUE = 139.06
CENVAT = 10
VAT = 11 CST = 2.42 VAT = 13.91
49
INVOICE VALUE = 152.97
INVOICE VALUE = 121 INVOICE VALUE = 123.42
 GST SCENARIO
(iNTER STATE TRADE OF GOODS) STATE (Y)
STATE (X) SGST = 12.22 TAX TOTAL =
SGSTS= 10 TAX TOTAL IGST = (9.78) RS. 12.22
= RS. 1.10 Cash = 2.44 (2.44 +
(10-10*+ 9.78**)
1.10) ADDL.
TAX =
1.10

INPUT CAR
DEALER CONSUMER
MANUFACTURER A MANUFACTURER B C

IGST = 22 Invoice Value = 133.10

Invoice Value = 120 * STATE (X) WILL TRANSFER RS.
CGST = (10) (-) ITC_CGST = 10
(-) ITC_IGST = 22___
10 ( SGST)
Cost USED FOR PAYMENT
= 111.10
SGST = (10) CENTRAL
(-) ITC_SGST = 10_ OF IGST TO CENTRE
Cash = 2 TAX TOTAL = 100
Cost
** CENTRE WILL TRANSFER
= Rs.12.22 CGST = 12.22
RS.9.78 (IGST) USED FOR
(10+2+10*- IGST = (12.22)
PAYMENT OF SGST TO STATE (Y)
TE= 10
CGST 9.78**) Cash= 0
TAX INVOICE C
TAX INVOICE B
TAX INVOICE A COST = 111.10
COST = 100
VALUE = 100 VALUE = 122.21
VALUE = 110
CGST (10%) = 10 CGST (10%) = 12.22
IGST (20%) = 22
SGST (10 %) = 10 SGST (10 %) = 12.22
ADDL. TAX (1%) = 1.10 50
INVOICE VALUE = 120 INVOICE VALUE = 146.65
INVOICE VALUE = 133.10
 COMPARISON

S. No. Particulars Intra-State Inter-state

Present GST Present GST

1. Initial Value 100.00 100.00 100.00 100.00
2. Centre’s Tax 11.00 12.10 11.00 12.22
3. State (X)’s Tax 11.00 1.10
13.31 12.10
4. State (y)’s Tax 16.91 12.22
5. State’s Total Tax 13.31 12.10 27.91 13.32
6. Total Tax paid to Govt. 24.31 24.20 38.91 25.54
7. Non-Vatable Tax borne by 11.00 0.00 25.00 1.10
Business
8. Total Tax paid by Consumer 13.31 24.20 13.91 24.44
9. Final value paid by Consumer 146.41 145.20 152.97 146.65

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