GST Input Tax Credits (ITC)
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Eligibility and Conditions to Claim ITC - Section 16
Section 16 of the Central Goods and Services Tax (CGST) Act, 2017, lays down the eligibility criteria and conditions for claiming Input Tax Credit (ITC) under GST. It specifies that a registered person is eligible to claim ITC on inputs, input services, and capital goods used or intended to be used in the course of business.
These sections of the GST law govern various aspects of Input Tax Credit (ITC) under the GST regime, including eligibility criteria, conditions, restrictions, and procedural aspects. Understanding these provisions is essential for taxpayers to effectively claim and utilize ITC while complying with GST regulations.
- Forms: While there are no specific forms associated with Section 16, Form GSTR-2A and Form GSTR-2B are important for reconciling and verifying ITC claimed by recipients with the details uploaded by suppliers.
Section 17 - Apportionment of Credit and Blocked Credits
- Description: Section 17 of the CGST Act, 2017, deals with the apportionment of credit and specifies certain circumstances where ITC is blocked or restricted. It outlines various situations where ITC cannot be claimed or is restricted, such as for goods and services used for personal consumption, exempt supplies, or non-business purposes.
- Forms: No specific forms are associated with Section 17. However, taxpayers need to ensure compliance with the provisions of this section while claiming ITC.
Section 18 - Availability of Credit in Special Circumstances
- Description: Section 18 of the CGST Act, 2017, provides for the availability of ITC in special circumstances such as registration under GST, voluntary registration, or switch from composition scheme to regular scheme. It allows taxpayers to claim ITC on inputs, input services, and capital goods held in stock on the day immediately preceding the effective date of registration.
- Forms: Form GST ITC-01 is used for intimation of ITC available in special circumstances, such as registration, composition scheme withdrawal, etc.
Section 19 - Taking Input Tax Credit in Respect of Inputs and Capital Goods Sent for Job Work
- Description: Section 19 of the CGST Act, 2017, deals with the provisions related to ITC on inputs and capital goods sent for job work. It allows the principal to take credit on inputs or capital goods sent for job work and received back within specified timeframes.
- Forms: No specific forms are associated with Section 19. However, taxpayers need to maintain proper documentation and comply with the conditions specified under this section.
Section 20 - Manner of Distribution of Credit by Input Service Distributor
- Description: Section 20 of the CGST Act, 2017, outlines the manner of distribution of ITC by an Input Service Distributor (ISD) among its branches or units. It allows the ISD to distribute ITC on input services to its units or branches based on a prescribed method.
- Forms: Form GST ITC-02 is used for distributing ITC by an ISD to its units or branches.
Section 21 - Manner of Recovery of Credit Distributed in Excess
- Description: Section 21 of the CGST Act, 2017, specifies the procedure for recovery of excess ITC distributed by an ISD to its units or branches. It outlines the steps to be taken by the ISD for recovery of excess credit distributed.
- Forms: No specific forms are associated with Section 21. However, the ISD needs to ensure proper reconciliation and compliance with the provisions of this section.
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