INPUT TAX CREDITInput tax credit: Conditions O Possession of a tax invoice, or other tax-paying document QO Goods / services have been received QO Tax charged in respect of said supplies has been actually paid to the credit of the Government Q Return has been furnished O Credit for goods against an invoice, which are received in lots or installments can be taken only upon receipt of the last lot or installmentITC on Capital Goods * Where the registered person has claimed depreciation on the tax component of the cost of capital goods and plant and machinery under the provisions of the Income-tax Act, 1961, the input tax credit on the said tax component shall not be allowedTimelines for taking Input Tax Credit Credit in respect of any invoice pertaining to a financial year can be taken only up to earlier of: a) The filing of return for the month of September following the said financial year; or b) Filing of the relevant annual return Restrictions in case of new registrations A registered person shall not be entitled to take input tax credit in respect of any supply of goods or services or both to him after the expiry of one year from the date of issue of tax invoice relating to such supplyRestrictions on ITC (Blocked credits)No ITC on Motor Vehicles ITC shall not be available for motor vehicles and other conveyances except when they are used— (A) Further supply of such vehicles (B) Transportation of passengers or goods (C) Imparting training on driving Thus, no ITC on vehicles purchased by company and given to its Directors, Managers etc.No ITC on facilities to employees Rent-a-cab, life insurance and_ health insurance except where— the Government notifies the services which are obligatory for an employer to provide to its employees under any law for the time being in force. Travel benefits extended to employees on vacation such as leave or home travel concessionNo ITC on works contract * Works contract services when supplied for construction of an immovable property (other than plant and machinery) except where it is an input service for further supply of works contract service; * Goods or services or both received by a taxable person for construction of an immovable property (other than plant or machinery) on his own account including when such goods or services or both are used in the course or furtherance of businessORDER OF UTILIZATION of ITC Amount of credit available with the taxable person shall be credited to his ‘electronic credit ledger’ and is permitted to be utilized in the following order IGST: - IGST - CGST - SGST CGST : - CGST - IGST SGST : - SGST - IGST Input tax credit of CGST shall not be utilized towards payment of SGST and similarly input tax credit of SGST shall not be utilized towards payment of CGST.ORDER OF UTILIZATION of ITC Amount of credit available with the taxable person shall be credited to his ‘electronic credit ledger’ and is permitted to be utilized in the following order IGST: - IGST - CGST - SGST CGST : - CGST - IGST SGST : - SGST - IGST Input tax credit of CGST shall not be utilized towards payment of SGST and similarly input tax credit of SGST shall not be utilized towards payment of CGST.COMMENTS * If consideration not paid within 180 days, ITC availed shall be added to output tax liability * If goods are lost or destroyed by fire, no ITC shall be available * No ITC on goods distributed as gifts or free samplesContd... ITC shall be initially allowed provisionally for two moths It will be final only after matching. In case of any mismatch discrepancies shall be communicated to concerned supplier and recipient If mismatch continues, system will automatically reverse the ITC In this two months period ITC can only be used to pay self assessed out put tax.