GST FAQ’S

Is input tax credit allowed only after matching?
No, input tax credit is allowed provisionally for two months. The supply details are matched by the system and discrepancies are communicated to concerned supplier and recipient. In case mismatch continues, the ITC taken would be reversed automatically.

Can provisionally allowed ITC be used for payment of all liabilities?
No, provisionally allowed ITC can be used only for the payment of self-assessed output tax in the return.

What will be the tax impact when capital goods on which ITC has been taken are supplied by taxable person?
In case of supply of capital goods or plant and machinery on which input tax credit has been taken, the registered person shall pay an amount equal to the input tax credit taken on the said capital goods or plant and machinery reduced by the percentage points as may be specified in this behalf or the tax on the transaction value of such capital goods, whichever is higher.

What is the tax implication of supply of capital goods by a registered person who had taken ITC on such capital goods?
The registered person would pay an amount equal to ITC reduced by prescribed percentage point or tax on the transaction value, whichever is higher. But in case of refractory bricks, moulds and dies, jigs and fixtures when these are supplied as scrap, the person can pay tax on the transaction value.

You may contact the author for further information at taxwizersconsultant@gmail.com

Disclaimer: The above article is only for information purpose and is on based on the author’s interpretation of the relevant provision. The same should not be considered as professional advice.