Solutions Pvt. Ltd.

GST Handout updated 01/23

A few extra points - ITC

Section 16 – Eligibility & Conditions of claiming ITC
a) Eligibility : Registered person – furtherance of business – credited in e-credit ledger
b) Conditions : Possession of Tax invoice – Possession of Goods/Services – Tax paid to Govt. – Return filed –
from 1.4.21 GSTR2A
c) Extra points : Recipient must pay the supplier within 180 days (from invoice date) – lot/instalment last
– No depreciation under I.T Act allowed – To avail credit within November (or extended annual return)
Section 17 – Apportionment of Credit & Blocked Credits
a) Goods/Services used for – Party business – Partly other Available only for business part
b) Goods/Services used for – Party taxable – Partly exempt Attributable portion of taxable supply only
c) No ITC can be claimed on list of goods/services as provided in Section 17(5)
d) No ITC on tax paid u/Ss – 74, 129, 130 (evasion – retention – detention)
Section 18 – Availability of credit in special circumstances
i) Entitled to avail ITC – New Registrants/Voluntary Registrants – if effective date is obliged – available till 1
yr (invoice date)
ii) Entitled to avail ITC – when switching from Composite to Regular
iii) Entitled to avail ITC – When exempt items becomes taxable
iv) NOT Entitled (Reversal) – when switching from Regular to Composite
v) NOT Entitled (Reversal) – when taxable items becomes exempt
vi) NOT Entitled (Reversal) – Cancellation of registration
vii) Entitled but to different person – In case of Transfer, Sale, Merger, Death of sole prop. – ITC available to
parent organisation to be transferred to new organisation otherwise ITC will lapse automatically
Section 19 – Availability of credit Principal (Job work)
a) Entitled to Principal – ITC on Goods – if such goods are received back within 1 yr from the agent
b) Entitled to Principal – ITC on Assets – if such assets are received back within 3 yrs from the agent
Section 20 & 21 – Availability of credit to ISD
Entitled if GSTR 6 is filed and Rule 54 is obliged

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