GST MOD 11-13

Question 1

section 16 of cgst act

Answer 1

ELIGIBILITY OF TAKING ITC: SECTION 16 (1)
individual must have:
(A) Registration under GST
(B) Goods/services to be used for business purpose

CONDITIONS:
A) Possession of tax paying documents
(B) Receipt of the goods and or services
(C) Tax leviable on supply actually paid to Government
(d) Filing of return

Note:**Goods received in lots: ITC available only on receipt of last lot **{First proviso to Section 16 (2)}

Payment for the invoice to be made within 180 days
{second proviso to Section 16 (2)}
-however, this 180 days waala provisio does not apply in the following cases:
1. supplies on which the tax is payable under RCM
2. deemed supplies without consideration
3. addition made to value of supplies on account of suppliers liability, in relation to such supplied, being incurred by the recipient of the supply.

in point 2 and 3, the value of supply is deemed to have been paid

Question 2

section 16 (3) and (4)

Answer 2

• 16(3) if depreciation is claimed on the tax component - ITC is not allowed - to prevent dual benefit
• 16(4) time limit for filing ITC= due date for filing of return for month of sept. of succeeding financial year or date of filing of annual returns whichever is earlier.

llustration 1:

Atlas Pvt. Ltd. received 50 invoices for inputs and input services in September.
Total ITC involved in all 50 invoices = ₹ 5 lakh.
Suppliers have furnished details in their GSTR-1 for 40 invoices involving ITC of ₹ 3 lakh by the due date.
-Based on the information provided and a prudent interpretation of Section 16(2)(c), Atlas Pvt. Ltd. can definitely claim ITC of ₹ 3 lakh for the 40 invoices where the suppliers have furnished the details in GSTR-1 by the due date.

Question 3

**Section 17 – Apportionment of Input Tax Credit (ITC) & Blocked Credits*

Answer 3

Section 17 – Apportionment of Input Tax Credit (ITC) & Blocked Credits

🧾 Apportionment of ITC (When only part of your supplies are taxable):
- If a registered person uses goods or services partly for business and partly for non-business purposes → ITC allowed only for business use.
- If goods/services are used for both taxable & exempt supplies → ITC is allowed only for the taxable portion.
- Banks, financial institutions, or NBFCs may:
- Either follow standard ITC apportionment rules, or
- Availa flat 50% ITC on inputs, input services, and capital goods.

🚫 Blocked Credits (ITC not allowed):
You cannot claim ITC for the following:

• Motor vehicles (for transportation of persons) unless used for:
  
  • Further supply (e.g., resale)
  • Transportation of passengers
  • Training on driving
• Food & beverages, outdoor catering, beauty treatment, health services, etc., unless:
  
  • They are used to make an outward supply of the same category (e.g., catering company buying food).
• Memberships to clubs, fitness centers, or health services.
• Rent-a-cab, life/health insurance, except when:
  
  • Mandated under law or
  • Used for making the same category supply.
• Works contract services (like construction), unless for further supply of works contract service.
• Construction of immovable property (excluding plant & machinery), when constructed on own account.

goods or services or both received by a non-resident taxable person except
on goods imported by him;
- Goods/services used for personal consumption.

• Goods lost, stolen, destroyed, or written off, or given as free samples/gifts.
• Tax paid under composition scheme (Section 10).

Question 4

blocking of ITC for cars scenarios

Answer 4

1. ITC on cars purchased by manufacturing company for official use of employees is BLOCKED
2. ITC on cars purchased by a car dealer for sale to customers is allowed
3. ITC on cars purchased by a company engaged in renting out cars for transport of passangers is ALLOWED