31 Oct 2017Posted By: chaman


How Can We Take Service Tax - VAT Input Tax Credit in GST RETURN

 

What to do before lodging the Claim of the difference of tax under ITC?

 

Transfer of Credits

The New system under GST effective from July 1, 2017, allows a taxable person to collect the credits of previous taxes paid (before 01.07.2017) in the current system effective from 01.07.2017. This is subject to the condition of production of proof of last tax return filed under the previous system.

 

We have to make sure that we have taken the account of stock on 30.06.2017. So we can file a return for ITC as and when we file the returns for the period ending 30.06.2017.

 

Central Excise credits

We may carry forward the balance of CENVAT and the same figure should be reflected in the last return.

  • My return filed under ER-1 must show the CENVAT balance.

  • Also, the transfer must be allowed under GST.

 

The CENVAT will now be CGST.

 

Service Tax Credits

Here the prices have to be inflated on the basis of the undermentioned taxes:

  • Service Tax                      14%

  • Krishi Kalyan Cess          0.5%

  • Swatchh Bharat Cess      0.5%

Here the ITC is available only for Krishi Kisan cess and Service tax. This has to be carried forward for ITC and form ST-3 is to be submitted. The closing balance of the service tax will be transferred to CGST Input Tax Credit.

 

VAT Credits

In this case, we have got to be registered under VAT and have to file returns under monthly and quarterly basis. We have to carry forward the balance of input VAT credits to SGST input tax credit.

 

Now, in all the above cases we can transfer pre GST input credits to the GST system, only if we meet the under mentioned requirements:

  • We must be eligible for claiming ITC under GST.

  • We must have all the relevant documents of the closing stock of the inputs.

  • The relevant invoices must not be older than 12 months from the date of GST migration.

  • We have to transfer the reduced prices to our customer.

 

The following items are, on which no credit is allowed:

*No credits are allowed on motor vehicles and conveyances except the following:

 

  1. Such vehicles which are further sold.

  2. Passenger transport.

  3. Transportation of goods

  4. Health services and beauty treatments.

  5. Food and beverages.

 

If goods are taken to deliver as it is, the ITC is allowed.

  1. Goods and services for self-use.

  2. Goods lost stolen

  3. Goods lost, stolen, destroyed, written off or gifted.

  4. In case of any tax paid due to non-payment or short tax payment, excessive refund or ITC availed by fraud.

  5. Goods and/or services received by a non-taxable NRI

 

Input Tax Credit Limit Rose

The council of GST raised the limit of ITC from 40% to 60%, which gave a big relief to the business people. The difference credit shall be afforded after the settlement. But this has been allowed on a particular segment of a tax rate of 18% and above. Besides, a 100% shall be allowed on high-value items of Rs25000/- and above.

 

 In case you need assistance with GST Return you can fill out our inquiry form and arrange a call from E-Startupindia business advisors or you can connect with us at 8881069069 

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