Chartered Accountant (AIR-16), 4 years experience with Aditya Birla Group, Mumbai, Currently practicing in GST; passionate about teaching.

Palkesh Asawa

In this course, we discuss the provisions of input tax credit, which is arguably the backbone of GST law in India. In terms of CA exams also, input tax credit has a significant weightage. We shall see lots of practical examples and questions too.

Choose from the various concepts taught in a comprehensible way for students looking to strengthen their CA preparation.

CA Foundation

English

GST Course 8: Input Tax Credit

Goods and Services Tax Law

Elective: Indirect Tax Laws

CA Final Group 2

CA, CS, and CMA

Ace the toughest competitive and government exams in India 

Test Preparation

In this lesson I have given an overview of concepts that we will study in the course along with the context as to why ITC is important. We also quickly discuss how we are going to approach this course and what are the benefits for you.

Overview

In this course we discuss the definition of inputs along with practical examples of it. We also distinguish between "goods" and "inputs" which helps us to appreciate the nuances of GST law.

Meaning of "Inputs"

In this lesson we talk about the meaning of capital goods (those which are capitalised in the books of account and used for business purposes) and look at practical examples to understand it.

Meaning of "Capital Goods"

In this lesson we discuss the meaning of "input services" and distinguish it from services. We also discuss why it's important to classify things as either inputs or capital goods or input services along with illustrative examples.

Meaning of "Input Services"

In this lesson we discuss the meaning of "input tax" and "input tax credit" and look at all the inclusions in and exclusions from the definition of "input tax". We also discuss practical examples as to why supplies made "to" the registered person are eligible for ITC.

"Input Tax" and "Input Tax Credit" defined

In this lesson we talk about section 16(1) i.e. claim of input tax credit and look at certain illustrative examples to properly understand the conditions given in section 16(1) in relation to claim of ITC.

Section 16(1): claim of ITC

In this lesson we talk about the four major conditions to claim ITC as per section 16(2): invoice received, goods received, tax paid to government and returns filed.

Conditions to claim ITC

In this lesson, we talk about the important time limits in relation to claiming credit: in case of purchase of goods in multiple consignments and in case of payment not being made to the supplier within 180 days from date of invoice along with practical examples.

Time restrictions on claiming ITC

In this lesson we talk about the ITC on capital goods in case depreciation is also claimed on those capital goods as per income tax act. We also look at the last date to claim the input tax credit of invoices based on the due dates of September filing.

ITC on fixed assets and last date to claim ITC

In this lesson we talk about residuary rules of claiming ITC including reavailment of credit, interest in case of reversal and non availability in case of tax paid on demand in cases of fraud.

Additional rules related to ITC claim

In this lesson, we talk about the concept of apportionment of input tax credit in case goods or services are used partly for exempt supplies and partly for taxable supplies or for business/non-business uses. We also discuss why ITC is available for zero rated supplies.

Apportionment of ITC - concept

In this lesson we talk about Rule 42 of CGST Rules which talks about segregation of ITC related to exempt supplies and non-business related supplies in case of inputs and input services only.

Apportionment of ITC - Rule 42

In this lesson we study numerical calculations and examples of Rule 42 about distributing the ITC between exempt and non-exempt portion along with business and non-business portion.

Examples of Rule 42 (Part - 1)

In this lesson we take some more examples of Rule 42 to discuss that zero rated supplies will be treated as taxable and that abnormal ups and downs can come due to this rule.

Examples of Rule 42 (Part - 2)

In this lesson we talk about the Rule 43 for reversal of ITC related to exempted portion in case any capital goods are used partly for exempted items and partly for taxable items.

Rule 43: Reversal for capital goods

In this lesson we talk about examples of Rule 43 for reversal of ITC related to capital goods

Examples of Rule 43

In this lesson we talk about the discussion option available for banking companies to avail 50% of the eligible ITC in case they don't want to follow the complicated procedure of rule 42/43.

Other special rules for ITC reversal

In this lesson we talk about section 17(5) of the CGST Act having a list of goods or services on which ITC cannot be claimed. We also study the case where ITC cannot be claimed if the supplier has done any fraud etc.

Ineligible ITC

In this lesson we talk about the ITC of motor vehicles and the meaning of motor vehicle and conveyance along with understanding of exceptions to this rule, i.e. cases where ITC is allowed

ITC ineligible on motor vehicles

In this lesson we talk about the upcoming changes in rules related to ITC of motor vehicles, which are not yet effective but will mostly be notified by Feb 2019.

Upcoming changes in motor vehicle rules

In this lesson we talk about the concept of blocked ITC on food, beverages, rent a cab and other services along with examples of situations which are covered by the exceptions to the general block ITC rules.

Blocked ITC

In this lesson we talk about the meaning of works contract and construction and understand that ITC cannot be claimed if it's for a construction contract to the extent of capitalisation.

ITC for works contract

In this lesson we discuss the provisions related to blocked ITC in case of immovable property being constructed by a person on his own account along with logic for not allowing ITC on immovable property.

Blocked ITC for self construction

In this lesson we discuss that ITC shall not be allowed in case goods were lost or destroyed and also understand what happens in case of normal loss or free gifts

ITC on goods lost or given for free

In this lesson we discuss the special cases in which ITC can be claimed by the taxpayer (such as new registration or when supply becomes taxable) along with key provisions to remember in that.

Claim of ITC in special cases

In this lesson we discuss the provisions for transfer of ITC in case a business is being sold or merged etc, and we also see two special ITC forms - 02 and 01 along with how to file them.

Transfer of ITC in case of merger, etc.

In this lesson we talk about the meaning of job work as well as facility to avail ITC in case of goods sent on job work even if no tax is payable on it subject to certain conditions, as well as logic behind form ITC-04

ITC in case of job work

In this lesson we talk about the meaning of input service distributor along with conditions which have to be fulfilled for distribution of credit by ISD and which turnover has to be seen for this purpose.

Input Service Distributor

In this lesson we talk about the method of distribution of input tax credit by an input service distributor including the ratio to be followed and the procedure for determination of amount of credit.

Procedure for ITC distribution by ISD

In this course we take a review of the entire course useful for revision purposes and to recollect all the important learnings from this course from a single lesson.

Review of ITC course (part - 1)

Review of ITC course (part - 2)

Myself a Chartered Accountant (CA) & Company Secretary (CS) & having the 10 years experience. I have worked with TCS ICICI Bank DK etc. Now 

CA Arun Chhajer

(Hindi) GST Audit Checklist

Rajesh K Verma

This course will cover gst topic with latest amendment . Hope that you will enjoy this course. Thank you

(Hindi) CA Exams: Goods and Services Tax Law for May / November 2019

In this course we talk about the place of supply of services in case the recipient or supplier is outside India (section 13 of IGST Act)

(Hindi) GST Course 4: Place of Supply (Section 13 of IGST Act)

In this course we talk about the provisions of levy and collection of GST, including the charging section, basic exemption limit, composition scheme, mixed and composite supplies.

GST Course 5: Charge of GST

This course describes basic concepts of Customs law, indirect tax, ca exams.

Lessons

31 lessons • 5h 31m

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Overview

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Meaning of "Inputs"

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Meaning of "Capital Goods"

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Meaning of "Input Services"

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"Input Tax" and "Input Tax Credit" defined

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Section 16(1): claim of ITC

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Conditions to claim ITC

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Time restrictions on claiming ITC

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ITC on fixed assets and last date to claim ITC

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Additional rules related to ITC claim

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