As per the Draft Input Tax Credit Rules, when regular taxable person changes to composition scheme, for the capital goods remaining in stock the input tax credit to be reversed, is based on the residual life of the asset as 5 years and input tax credit will be computed on pro-rata basis for the remaining life of the asset.
GST Tip – 205
As per Draft Input Tax Credit Rules, the taxpayer who has registered for GST as regular taxpayer now opts for Composition Scheme, then the input tax credit has to paid in FORM GST ITC-03 as output tax liability for the inputs lying in stock, and inputs contained in semi-finished and finished goods lying in stock, the input tax credit shall be calculated proportionately on the basis of corresponding invoices on which credit had been availed by the registered taxable person on such input.
GST Tip – 203
As per the Draft Input Tax Credit Rules, Input Tax Credit is available only if the registered person has issued the tax invoice for the supply of goods or services as given in the Revised Invoice Rules and the same is furnished in the GSTR – 2 of the recipient and GSTR -1 of the supplier of goods or services are matched.
GST Tip – 202
As per the Draft Input Tax Credit Rules, input tax credit on capital goods is allowed if the same are used exclusively for the supply of taxable goods including zero-rated goods. If they are used partially for the exempted goods and taxable goods, then ITC has to be taken the basis of Rule 8.
GST Tip – 201
As per the Draft Input Tax Credit Rules, the registered person on sale, merger, de-merger, amalgamation, lease or transfer or change in ownership of business for any reason, furnish the details of sale, merger, demerger, amalgamation, lease or transfer of business, in FORM GST ITC-02 on common portal electronically for the transfer of the Input Tax Credit balance in his electronic credit ledger to the transferee.
GST Tip – 200
As per the Draft Input Tax Credit Rules, the Input Service Distributor will issue an ISD invoice clearly indicating on the invoice that it is issued only for distribution of input tax credit.
GST Tip – 198
As per the Draft Input Tax Credit Rules, Input tax credit can be availed only the debit note issued by the supplier of goods or services or both and the taxable value or tax charged in that tax invoice is found to exceed the taxable value or tax payable in respect of such supply, or where the goods supplied are returned by the recipient, or where goods or services or both supplied are found to be deficient. This means the recipient cannot issue a credit note under GST and adjust the tax for any of the above-said reasons.