Tax in India

In terms of Rule 42(j) of the CGST Rules, 2017, the credit attributable to non-business
purpose (D2) will be equal to 5% of C2 [Common Credit]’ (Refer Answer to Q56)

(ICAI FAQ PUBLICATIONS 06-09-2017 INPUT TAX CREDIT: FAQ NO. 57)

The eligible credit in such cases are determined as under in terms of Rule 42 (k) of the CGST Rules, 2017:
Net eligible credit [C3] = C2 – (D1 + D2)
D1 = Credit attributable to exempt supplies
D2 = Credit attributable to non-business purposes (5% of C2 i.e. Common Credit)

(ICAI FAQ PUBLICATIONS 06-09-2017 INPUT TAX CREDIT : FAQ NO. 58)

No. The recipient is required to do the apportionment on an annual basis also before the due date of filing the return of the September month of the following year. The differentials will be liable to be paid with interest (if the annual disallowance is higher) and will be eligible as credit (if the annual disallowance is lesser).

(ICAI FAQ PUBLICATIONS 06-09-2017 INPUT TAX CREDIT : FAQ NO. 59)

1. In terms of Section 18(1) (d) of the Act, where an exempt supply made by a person becomes taxable supply, such a person will be entitled to claim credit of tax paid on stock held (inputs, semi-finished goods or finished goods) relatable to exempt supply and on the capital goods exclusively used for exempt supply preceding the day when the supply becomes taxable.
2. The credit of capital goods shall, however, stand reduced by 5 percentage points for every quarter or part thereof from the date of the issue of the
   invoice for such goods.
3. However, tax paid on capital goods used for both, taxable and exempt supply will not be eligible as input tax credit.

(ICAI FAQ PUBLICATION 06-09-2017 -: Availability of Credit in special circumstances: FAQ NO.27)

The credits are determined in terms of Rule 43 of the CGST Rules, 2017 are as under:
(a) Input tax in respect of capital goods used or intended to be used exclusively for non-business purposes or used or intended to be used exclusively for effecting exempt supplies shall be indicated in FORM GSTR-2 and shall not be credited to his electronic credit ledger
(b) Input tax in respect of capital goods used or intended to be used exclusively for effecting taxable supplies including zero-rated supplies shall be indicated in FORM GSTR-2 and shall be credited to the electronic credit ledger
(c) Out of the total input tax credit on capital goods, the amount of input tax credit in (a) and (b) shall be deducted from total input tax credit and shall be credited to the electronic credit ledger and the useful life of such good shall be taken as five years.
(d) The common input tax credit attributable to exempt supplies shall be calculated as a ratio of the aggregate value of exempt supplies to the total turnover of the person in the tax period.
(e) In case if the turnover details are not available then the values for the preceding tax period shall be taken for calculation.

(ICAI FAQ PUBLICATIONS 06-09-2017 INPUT TAX CREDIT : FAQ NO. 60)

In terms of Rule 44(3) of the CGST Rules, 2017 if the invoices relating to inputs in stock are not available, the prevailing market price of goods on the effective date of occurrence of the events i.e. change of the scheme from Composition to Regular scheme, supplies becoming taxable which were earlier exempt and cancellation of registration, should be considered for estimation.

(ICAI FAQ PUBLICATIONS 06-09-2017 INPUT TAX CREDIT: FAQ NO. 62)

The conditions prescribed in respect of inputs/ capital goods sent for job work are set out in Rule 45 of the CGST Rules, 2017 ass under:
(a) The inputs, semi-finished goods or capital goods are to be sent to the job worker under the cover of a challan issued by the principal including cases where the inputs, semi-finished goods or capital goods are sent directly to job worker;
(b) The challan issued by the principal should contain the details as specified in Rule 55 of the CGST Rules, 2017
(c) The details of challan in respect of goods dispatched to/ received from a job worker or sent from one job worker to another during a quarter shall be included in Form GST ITC-04 furnished for that period on or before the 25th day of the month succeeding the said quarter.
(d) If the inputs/ capital goods are not returned within the 1 year/ 3 years,
respectively, it shall be deemed that such inputs or capital goods had been supplied by the principal to the job worker on the day when the said inputs or
capital goods were sent out and the said supply shall be declared in FORM GSTR-1. Further, the principal shall be liable to pay the tax along with applicable interest.

(ICAI FAQ PUBLICATIONS 06-09-2017 INPUT TAX CREDIT: FAQ NO. 63)

In terms of Explanation 2(a) to Chapter V of the CGST Rules, 2017, the value of land and building adopted for the purpose of paying stamp duty should be considered.

(ICAI FAQ PUBLICATIONS 06-09-2017 INPUT TAX CREDIT: FAQ NO. 64)