In this article we will understand the ITC Reversal rule pertaining to GSTR-3B.
Navigation-- Login-- Gstr3B-- 4. Eligible ITC section-- B. ITC Reversed-- (1) & (2)
From the format of Table 4, following is noteworthy:
I. All non-reclaimable reversal of ITC needs to be reported in
table 4(B)(1)
II. All reclaimable ITC reversals may be reported in table 4(B)(2).
It should be noted that ITC reversed under 4(B)(2) can be reclaimed in table
4(A)(5) at appropriate time and the break-up detail of such reclaimed ITC
should be provided in 4(D)(1) in the same return.
III. The ITC not-available mentioned in GSTR-2B of the taxpayer has
to be reported in 4(D)(2) of table 4.
IV. Any ITC availed inadvertently in Table 4(A) in previous tax
periods due to clerical mistakes or some other inadvertent mistake maybe
reversed in Table 4(B)2.
RULES
A.
Rule 38- Claim of Credit by a banking company or a financial institution-
A
banking company or a financial institution, including a non-banking financial
company, engaged in the supply of services by way of accepting deposits or
extending loans or advances that chooses not to comply with the provisions of
sub-section (2) of Section 17, in accordance with the option permitted under
sub-section (4) of that section, shall follow the following procedure, namely-
a)
the said company or institution shall not avail the credit of-
i) the tax paid on inputs and input services that are used for
non-business purposes: and,
ii) the credit attributable to the supplies specified in sub-section (5)
of section 17
b)
the said company or institution shall avail the credit of tax paid on input and
input service referred to in the second provision to sub-section (4) of section
17 and not covered under clause (a)
c)
50% of the remaining amount of input tax shall be the input tax credit
admissible to the company or the institution (and the balance amount of input
tax credit shall be reversed in Form GSTR-3B)
d)**
(omitted w.e.f 01.10.2022 wide notification no.19/2022- CT dated 28.09.22)
A.
Rule 42- Manner of determination of input tax credit in respect of inputs or
input services and reversal thereof-
1)
The input tax credit in respect of inputs or input services, which attracts the
provision of sub section (1) or sub section (2) of section 17, being partly
used for the purpose of business and partly for other purpose, or partly used
for effecting taxable supplies including zero rated supplies and partly for
effecting exempt supplies, shall be attributed to the purpose of business or
for effecting taxable supplies in the following manner, namely-
a) The total input tax involved on inputs and input services in a tax
period, be denoted as "T";
b) The amount of input tax, out of "T", attributable to inputs
and input services intended to be used exclusively for the purpose other than
business, be denoted as T1
c) The amount of input tax, out of "T", attributable to
inputs and input services intended to be used exclusively for effecting
exempt supplies, be denoted as T2
d) The amount of input tax, out of "T", in respect of inputs
and input services on which credit is not available under sub-section (5) of
section 17, be denoted as T3
e) The amount of input tax credit credited to the electronic credit
ledger of registered person, be denoted as C1 and calculated as-
C1=
T - (T1 + T2 + T3)
f) The amount of input tax credit attributable to inputs and input
services intended to be used exclusively for effecting supplies other than
exempted but including zero rated supplies, be denoted as T4
1[Explanation: For the purpose of this clause, it
is hereby clarified that in case of supply of services covered by clause (b) of
paragraph 5 of Schedule II of the said Act, value of
T4 shall be zero during the construction phase because inputs and input
services will be commonly used for construction of apartments booked on or
before the date of issuance of completion certificate or first occupation of
the project, whichever is earlier, and those which are not booked by the said
date.]
g) T1, T2, T3 and T4 shall be determined and declared by
the registered person. (at summary level in Form GSTR-3B)
h) input tax credit left after attribution of input tax under clause (f)
shall be called common credit, be denoted as C2 and calculated as-
C2
= C1 - T4
i) the amount of input tax credit attributable towards
exempt supplies, be denoted as D1 and calculated as -
D1=
(E / F) x C2
Where,
E is the aggregate value of exempt
supplies during the tax period, and
F is the total turnover in the State of
the registered person during the tax period:
Provided that in
case of supply of services covered by clause (b) of paragraph 5 of Schedule II of the Act, the value of 'E/F' for
a tax period shall be calculated for each project separately, taking value of E
and F as under:-
E = aggregate carpet area of the
apartments, construction of which is exempt from tax plus aggregate carpet area
of the apartments, construction of which is not exempt from tax, but are
identified by the promoter to be sold after issue of completion certificate or
first occupation, whichever is earlier;
F = aggregate carpet area of the
apartments in the project;
Explanation 1 : In the tax period in which the
issuance of completion certificate or first occupation of the project takes
place, value of E shall also include aggregate carpet area of the apartments,
which have not been booked till the date of issuance of completion certificate
or first occupation of the project, whichever is earlier;
Explanation 2 : Carpet area of apartments, tax on
construction of which is paid or payable at the rates specified for items (i),
(ia), (ib), (ic) or (id), against serial number 3 of the Table in the notification No. 11/2017-Central Tax (Rate),
published in the Gazette of India, Extraordinary, Part II, Section 3,Sub-section (i)
dated 28th June, 2017 vide GSR number 690(E) dated
28th June, 2017, as amended, shall be taken into account for calculation
of value of 'E' in view of Explanation (iv) in paragraph 4 of the notification No. 11/2017-Central Tax (Rate),
published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i)
dated 28th June, 2017 vide GSR number 690 (E) dated
28th June, 2017, as amended.]
6[Provided further]that
where the registered person does not have any turnover during the said tax
period or the aforesaid information is not available, the value of 'E/F' shall
be calculated by taking values of 'E' and 'F' of the last tax period for which
the details of such turnover are available, previous to the month during which
the said value of 'E/F' is to be calculated;
Explanation : For the purposes of this clause, it is
hereby clarified that the aggregate value of exempt supplies and the total
turnover shall exclude the amount of any duty or tax levied under entry
84 7[and entry 92A] of List I of the Seventh Schedule to the Constitution
and entry 51 and 54 of List II of the said Schedule;
(j) the amount of credit attributable
to non-business purposes if common inputs and input services are used partly
for business and partly for non-business purposes, be denoted as 'D2'and shall
be equal to five per cent. of C2 ; and
(k) the remainder of the common credit
shall be the eligible input tax credit attributed to the purposes of business
and for effecting supplies other than exempted supplies but including zero
rated supplies and shall be denoted as 'C 3', where,-
C 3 = C 2 -
(D 1 +D 2 );
8[(l) the amount 'C3', 'D 1' and
'D2 ' shall be computed separately for input tax credit of central tax,
State tax, Union territory tax and integrated tax and declared in FORM GSTR-3B or
through FORM GST DRC-03;]
(m) the amount equal to aggregate of '
D1' and 'D2 ' shall be 9[reversed by the registered person in FORM GSTR-3B or
through FORM GST DRC-03 :]
Provided that where the amount of input tax
relating to inputs or input services used partly for the purposes other than
business and partly for effecting exempt supplies has been identified and
segregated at the invoice level by the registered person, the same shall be
included in 'T 1' and 'T 2' respectively, and the remaining amount of
credit on such inputs or input services shall be included in 'T 4'.
(2) 10[Except in case of supply
of services covered by clause (b) of paragraph 5 of the Schedule II of the
Act, the input tax credit] determined under sub-rule (1) shall be calculated
finally for the financial year before the due date for furnishing of the return
for the month of September following the end of the financial year to which
such credit relates, in the manner specified in the said sub-rule and-
(a) where the aggregate of the amounts
calculated finally in respect of 'D 1' and 'D 2' exceeds
the aggregate of the amounts determined under sub-rule (1) in respect of
'D1 ' and 'D2 ', such excess shall be 11[reversed by the
registered person in FORM GSTR-3B or
through FORM GST DRC-03 ]in
the month not later than the month of September following the end of the
financial year to which such credit relates and the said person shall be liable
to pay interest on the said excess amount at the rate specified in sub-section
(1) of section 50 for the period starting from the first day of April of the
succeeding financial year till the date of payment; or
(b) where the aggregate of the amounts
determined under sub-rule (1) in respect of 'D 1 'and 'D 2'
exceeds the aggregate of the amounts calculated finally in respect of
'D 1' and 'D 2', such excess amount shall be claimed as credit by the
registered person in his return for a month not later than the month of
September following the end of the financial year to which such credit relates.
12[(3) In case of supply of services
covered by clause (b) of paragraph 5 of the Schedule II of the
Act, the input tax determined under sub-rule (1) shall be calculated finally,
for each ongoing project or project which commences on or after 1st April,
2019,which did not undergo or did not require transition of input tax credit
consequent to change of rates of tax on 1st April, 2019 in accordance
with notification No. 11/2017-
Central Tax (Rate), dated the 28th June, 2017, published vide GSR No. 690 (E)
dated the 28th June, 2017, as amended for the entire period from the
commencement of the project or 1st July, 2017, whichever is later, to the
completion or first occupation of the project, whichever is earlier, before the
due date for furnishing of the return for the month of September following the
end of financial year in which the completion certificate is issued or first
occupation takes place of the project, in the manner prescribed in the said
sub-rule, with the modification that value of E/F shall be calculated taking
value of E and F asunder:
E = aggregate carpet area of the
apartments, construction of which is exempt from tax plus aggregate carpet area
of the apartments, construction of which is not exempt from tax, but which have
not been booked till the date of issuance of completion certificate or first
occupation of the project, whichever is earlier:
F = aggregate carpet area of the
apartments in the project;
and -
(a) where the aggregate of the amounts
calculated finally in respect of 'D1 ' and 'D2 ' exceeds the
aggregate of the amounts determined under sub-rule (1) in respect of 'D1 'and
'D2 ', such excess shall be reversed by the registered person in FORM GSTR-3B or
through FORM GST DRC-03 in
the month not later than the month of September following the end of the
financial year in which the completion certificate is issued or first
occupation of the project takes place and the said person shall be liable to
pay interest on the said excess amount at the rate specified in sub-section (1)
of section 50 for the
period starting from the first day of April of the succeeding financial year
till the date of payment; or
(b) where the aggregate of the amounts
determined under sub-rule (1) in respect of 'D 1 ' and
'D 2 'exceeds the aggregate of the amounts calculated finally in
respect of 'D 1 'and 'D 2 ', such excess amount shall be
claimed as credit by the registered person in his return for a month not later
than the month of September following the end of the financial year in which
the completion certificate is issued or first occupation takes place of the
project.
(4) In case of supply of services
covered by clause (b) of paragraph 5 of Schedule II of the
Act, the input tax determined under sub-rule (1) shall be calculated finally,
for commercial portion in each project, other than residential real estate
project (RREP), which underwent transition of input tax credit consequent to
change of rates of tax on the 1st April, 2019 in accordance with Notification No. 11/2017-
Central Tax (Rate), dated the 28th June, 2017, published vide GSR
No. 690 (E) dated the 28th June, 2017, as amended for the entire period from
the commencement of the project or 1st July, 2017, whichever is later, to the
completion or first occupation of the project, whichever is earlier, before the
due date for furnishing of the return for the month of September following the
end of financial year in which the completion certificate is issued or first
occupation takes place of the project, in the following manner.
(a) The aggregate amount of common
credit on commercial portion in the project (C 3
aggregate_comm ) shall be calculated as under,
C 3 aggregate_comm =
[aggregate of amounts of C3 determined under sub- rule (1) for the tax periods
starting from 1st July, 2017 to 31st March, 2019, x (A C /
A T )] + [aggregate of amounts of C3 determined under sub- rule (1)
for the tax periods starting from 1st April, 2019 to the date of
completion or first occupation of the project, whichever is earlier]
Where,-
A C = total carpet area of
the commercial apartments in the project
A T = total carpet area of
all apartments in the project
(b) he amount of final
eligible common credit on commercial portion in the project (C 3
final_comm )shall be calculated as under
C 3 final_comm =C 3 aggregate_comm x
(E/ F)
Where, -
E = total carpet area of commercial
apartments which have not been booked till the date of issuance of completion
certificate or first occupation of the project, whichever is earlier.
F = A C = total carpet area
of the commercial apartments in the project
(c) where, C 3
aggregate_comm exceeds C 3 final_comm, such excess shall be
reversed by the registered person in FORM GSTR-3B or
through FORM GST DRC-03 in
the month not later than the month of September following the end of the
financial year in which the completion certificate is issued or first
occupation takes place of the project and the said person shall be liable to
pay interest on the said excess amount at the rate specified in subsection (1)
of section 50 for the
period starting from the first day of April of the succeeding financial year till
the date of payment;
(d) where, C 3
final_comm exceeds C 3 aggregate_comm, such excess amount shall
be claimed as credit by the registered person in his return for a month not
later than the month of September following the end of the financial year in which
the completion certificate is issued or first occupation takes place of the
project.
(5) Input tax determined under sub-
rule (1) shall not be required to be calculated finally on completion or first
occupation of an RREP which underwent transition of input tax credit consequent
to change of rates of tax on 1st April, 2019 in accordance with notification No. 11/2017-
Central Tax (Rate), dated the 28th June, 2017, published vide GSR
No. 690 (E) dated the 28th June,2017, as amended.
(6) Where any input or input service
are used for more than one project, input tax credit with respect to such input
or input service shall be assigned to each project on a reasonable basis and
credit reversal pertaining to each project shall be carried out as per sub-rule
(3).]
Rule 43. Manner of determination of input tax
credit in respect of capital goods and reversal thereof in certain cases.-
(1) Subject to the
provisions of sub-section (3) of section 16, the input
tax credit in respect of capital goods, which attract the provisions of
sub-sections (1) and (2) of section 17, being partly
used for the purposes of business and partly for other purposes, or partly used
for effecting taxable supplies including zero rated supplies and partly for
effecting exempt supplies, shall be attributed to the purposes of business or
for effecting taxable supplies in the following manner, namely,-
(a) the amount of 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 1[****] 2[FORM GSTR-3B ]
and shall not be credited to his electronic credit ledger;
(b) the amount of input
tax in respect of capital goods used or intended to be used exclusively for
effecting supplies other than exempted supplies but including zero-rated
supplies shall be indicated in 1[****] 2[FORM GSTR-3B ]
and shall be credited to the electronic credit ledger;
2[Explanation: For the purpose
of this clause, it is hereby clarified that in case of supply of services
covered by clause (b) of paragraph 5 of the Schedule II of the
said Act, the amount of input tax in respect of capital goods used or intended
to be used exclusively for effecting supplies other than exempted supplies but
including zero rated supplies, shall be zero during the construction phase
because capital goods will be commonly used for construction of apartments
booked on or before the date of issuance of completion certificate or first
occupation of the project, whichever is earlier, and those which are not booked
by the said date.]
3[(c) the amount of
input tax in respect of capital goods not covered under clauses (a) and (b),
denoted as 'A', being the amount of tax as reflected on the invoice, shall
credit directly to the electronic credit ledger and the validity of the useful
life of such goods shall extend up to five years from the date of the invoice
for such goods:
Provided that where any capital
goods earlier covered under clause (a) is subsequently covered under this
clause, input tax in respect of such capital goods denoted as 'A' shall
be credited to the electronic credit ledger subject to the condition that the ineligible
credit attributable to the period during which such capital goods were covered
by clause (a),denoted as 'T ie ', shall be calculated at the rate of
five percentage points for every quarter or part thereof and added to the
output tax liability of the tax period in which such credit is claimed:
Provided further that the amount
'T ie' shall be computed separately for input tax credit of central tax,
State tax, Union territory tax and integrated tax and declared in FORM GSTR-3B .
Explanation. - An item of
capital goods declared under clause (a) on its receipt shall not attract the
provisions of sub-section (4) of section 18, if it is
subsequently covered under this clause.]
4[(d) the aggregate of
the amounts of 'A' credited to the electronic credit ledger under clause (c) in
respect of common capital goods whose useful life remains during the tax
period, to be denoted as 'T c ', shall be the common credit in
respect of such capital goods:
Provided that where any capital
goods earlier covered under clause (b) are subsequently covered under
clause(c), the input tax credit claimed in respect of such capital good(s)
shall be added to arrive at the aggregate value 'T c ';]
(e) the amount of input
tax credit attributable to a tax period on common capital goods during their
useful life, be denoted as 'T m' and calculated as-
T m = Tc
/ 60
5[Explanation.- For
the removal of doubt, it is clarified that useful life of any capital goods
shall be considered as five years from the date of invoice and the said formula
shall be applicable during the useful life of the said capital goods.]
(f) 6[****]
(g) the amount of common
credit attributable towards exempted supplies, be denoted as ' T e', and calculated as-
T e = (E / F) x T r
where ,
'E' is the aggregate
value of exempt supplies, made, during the tax period , and
'F' is the total
turnover 7[in the State]of the registered person during the tax period:
7[ Provided that
in case of supply of services covered by clause (b) of paragraph 5 of the Schedule II of the
Act, the value of 'E/F' for a tax period shall be calculated for each project
separately, taking value of E and F as under:
E= aggregate carpet area
of the apartments, construction of which is exempt from tax plus aggregate
carpet area of the apartments, construction of which is not exempt from tax,
but are identified by the promoter to be sold after issue of completion
certificate or first occupation, whichever is earlier;
F= aggregate carpet area
of the apartments in the project;
Explanation 1 : In the tax period in
which the issuance of completion certificate or first occupation of the project
takes place, value of E shall also include aggregate carpet area of the
apartments, which have not been booked till the date of issuance of completion
certificate or first occupation of the project, whichever is earlier.
Explanation 2 : Carpet area of
apartments, tax on construction of which is paid or payable at the rates
specified for items (i), (ia),(ib), (ic) or (id), against serial
number 3 of the Table in notification No. 11/2017-Central
Tax (Rate) published in the Gazette of India, Extraordinary,
Part II, Section 3, Sub-section (i) dated 28th June, 2017 vide GSR No. 690 (E) dated 28th June,
2017, as amended, shall be taken into account for calculation of value of 'E'
in view of Explanation (iv) in paragraph 4 of the notification No. 11/2017-Central
Tax (Rate) published in the Gazette of India, Extraordinary,
Part II, Section 3, Sub-section (i) dated the 28th
June, 2017 vide GSR
No. 690 (E) dated 28th June, 2017, as amended.]
8[ Provided further]that
where the registered person does not have any turnover during the said tax
period or the aforesaid information is not available, the value of 'E/F' shall
be calculated by taking values of 'E' and 'F' of the last tax period for which
the details of such turnover are available, previous to the month during which
the said value of 'E/F' is to be calculated;
Explanation. - For the purposes of this
clause, it is hereby clarified that the aggregate value of exempt supplies and
the total turnover shall exclude the amount of any duty or tax levied under
entry 84 8[and entry 92A] of List I of the Seventh Schedule to the Constitution
and entry 51 and 54 of List II of the said Schedule;
(h) the amount Te along with the applicable interest shall , during
every tax period of the useful life of the concerned capital goods, be added to
the output tax liability of the person making such claim of credit.
10[( i )The amount Te shall
be computed separately for input tax credit of central tax, State tax, Union
territory tax and integrated tax and declared in FORM GSTR-3B .]
11[(2) In case of supply
of services covered by clause (b) of paragraph 5 of schedule II of the Act, the
amount of common credit attributable towards exempted supplies ( Te final )shall be calculated finally for
the entire period from the commencement of the project or 1st July, 2017,
whichever is later, to the completion or first occupation of the project,
whichever is earlier, for each project separately, before the due date for
furnishing of the return for the month of September following the end of
financial year in which the completion certificate is issued or first
occupation takes place of the project, as under:
Te final = [(E1 + E2 + E3) /F]
x Tc final ,
Where,-
E 1 =
aggregate carpet area of the apartments, construction of which is exempt from
tax
E 2 =
aggregate carpet area of the apartments, supply of which is partly exempt and
partly taxable, consequent to change of rates of tax on 1st April, 2019, which shall be calculated as under, -
E 2 = [Carpet
area of such apartments] x [V 1 /
(V 1 +V 2 ) ],-
Where,-
V 1 is the
total value of supply of such apartments which was exempt from tax;
and
V 2 is the
total value of supply of such apartments which was taxable
E 3 =
aggregate carpet area of the apartments, construction of which is not exempt
from tax, but have not been booked till the date of issuance of completion
certificate or first occupation of the project, whichever is earlier:
F= aggregate carpet area
of the apartments in the project;
Tc final = aggregate of A final in respect of all capital goods used in
the project and A final for each
capital goods shall be calculated as under,
A final =A x (number of months
for which capital goods is used for the project/ 60) and,-
(a) where value of Te final exceeds the aggregate of amounts
of Te determined for each tax period under
sub-rule (1), such excess shall be reversed by the registered person in FORM GSTR-3B or
through FORM GST DRC-03 in
the month not later than the month of September following the end of the
financial year in which the completion certificate is issued or first occupation
takes place of the project and the said person shall be liable to pay interest
on the said excess amount at the rate specified in sub-section (1)of section 50
for the period starting from the first day of April of the succeeding financial
year till the date of payment; or
(b) where aggregate of
amounts of Te determined for each tax
period under sub-rule (1) exceeds Te final ,
such excess amount shall be claimed as credit by the registered person in his
return for a month not later than the month of September following the end of
the financial year in which the completion certificate is issued or first occupation takes place of the project.
Explanation .- For the purpose of
calculation of Tc final , part of the
month shall be treated as one complete month.
(3) The amount Te final an date dc final shall
be computed separately for input tax credit of central tax, State tax, Union
territory tax and integrated tax.
(4) Where any capital
goods are used for more than one project, input tax credit with respect to such
capital goods shall be assigned to each project on a reasonable basis and
credit reversal pertaining to each project shall be carried out as per sub-rule
(2).
(5) Where any capital
goods used for the project have their useful life remaining on the completion
of the project, input tax credit attributable to the remaining life shall be
availed in the project in which the capital goods is further
used;]
12[ 13[ Explanation
1]:-For the purposes of rule 42 and this
rule, it is hereby clarified that the aggregate value of exempt supplies shall
exclude: -
(a) 14[****]
(b) the value of
services by way of accepting deposits, extending loans or advances in so far as
the consideration is represented by way of interest or discount, except in case
of a banking company or a financial institution including a non-banking
financial company, engaged in supplying services by way of accepting deposits,
extending loans or advances; and
(c) the value of supply
of services by way of transportation of goods by a vessel from the customs
station of clearance in India to a place outside India.]
15[(d) the value of
supply of Duty Credit Scrips specified in the notification of the Government of
India, Ministry of Finance, Department of Revenue No. 35/2017-Central Tax
(Rate), dated the 13th October, 2017,
published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i),
vide number GSR 1284(E), dated the 13th October, 2017.]
5[Explanation 2 :
For the purposes of rule 42 and
this rule,-
( i ) the term "apartment" shall have the same
meaning as assigned to it in clause (e) of section 2 of
the Real Estate (Regulation and Development) Act, 2016 (16 of 2016 );
(ii) the term
"project" shall mean a real estate project or a residential real
estate project;
(iii) the term
"Real Estate Project (REP)" shall have the same meaning as assigned
to it in in clause ( zn ) of section 2 of the
Real Estate (Regulation and Development) Act, 2016 (16 of 2016 );
(iv) the term
"Residential Real Estate Project (RREP)" shall mean a REP in which
the carpet area of the commercial apartments is not more than 15 per cent. of
the total carpet area of all the apartments in the REP;
(v) the term
"promoter" shall have the same meaning as assigned to it in in clause
( zk ) of section 2 of the
Real Estate (Regulation and Development) Act, 2016 (16 of 2016 );
(vi) "Residential
apartment" shall mean an apartment intended for residential use as
declared to the Real Estate Regulatory Authority or to competent authority;
(vii) "Commercial
apartment" shall mean an apartment other than a residential apartment;
(viii) the term
"competent authority as mentioned in definition of "residential
apartment", means the local authority or any authority created or
established under any law for the time being in force by the Central Government
or State Government or Union Territory Government, which exercises authority
over land under its jurisdiction, and has powers to give permission for
development of such immovable property;
(ix) the term "Real
Estate Regulatory Authority" shall mean the Authority established under
sub- section (1) of section 20 (1) of
the Real Estate (Regulation and Development) Act, 2016 (No.16 of 2016) by the
Central Government or State Government;
(x) the term
"carpet area" shall have the same meaning assigned to it in in clause
(k) of section 2 of the
Real Estate (Regulation and Development) Act, 2016 (16 of 2016 );
(xi) an apartment booked
on or before the date of issuance of
completion certificate or first occupation of the project shall mean an
apartment which meets all the following three conditions, namely-
(a) part of supply of
construction of the apartment service has time of supply on or before the said
date; and
(b) consideration equal
to at least one installment has been credited to the bank account of the
registered person on or before the said date; and
(c) an allotment letter
or sale agreement or any other similar document evidencing booking of the
apartment has been issued on or before the said date.
(xii) The term
"ongoing project" shall have the same meaning as assigned to it in notification No. 11/2017-
Central Tax (Rate), dated the 28th June,
2017,published vide GSR No. 690(E) dated the 28th June, 2017, as amended;
(xiii) The term
"project which commences on or after 1st April, 2019"
shall have the same meaning as assigned to it in notification No. 11/2017- Central
Tax (Rate),dated the 28th June, 2017, published vide GSR No.
690(E) dated the 28th June, 2017, as amended;]
Rule 37. Reversal of
input tax credit in the case of non-payment of consideration.-
1[(1) A registered
person, who has availed of input tax credit on any inward supply of goods
or services or both, other than the supplies on which tax is payable on
reverse charge basis, but fails to pay to the supplier thereof, the amount
towards the value of such supply 3[whether wholly or
partly,] along with the tax payable thereon, within the time limit specified in
the second proviso to sub-section(2) of section 16, shall
pay 4[or reverse] an amount equal to the input tax credit
availed in respect of such supply 5[, proportionate to the
amount not paid to the supplier,] along with interest payable thereon
under section 50, while
furnishing the return in FORM GSTR-3B for
the tax period immediately following the period of one hundred and eighty
days from the date of the issue of the invoice:
Provided that the value of
supplies made without consideration as specified in Schedule I of the said
Act shall be deemed to have been paid for the purposes of the
second proviso to sub-section (2) of section 16:
Provided further that the
value of supplies on account of any amount added in accordance with the
provisions of clause (b) of sub-section (2) of section 15 shall
be deemed to have been paid for the purposes of the second proviso to
sub-section (2) of section 16.
(2) Where the said
registered person subsequently makes the payment of the amount towards the
value of such supply along with tax payable thereon to the supplier thereof,
he shall be entitled to re-avail the input tax credit referred to in
sub-rule (1).]
(3) 2[****]
(4)The time limit
specified in sub-section (4) of section 16 shall
not apply to a claim for re-availing of any credit, in accordance with the
provisions of the Act or the provisions of this Chapter, that had been reversed
earlier.
[Rule 37A. Reversal of
input tax credit in the case of non-payment of tax by the supplier and
re-availment thereof.-
Where input
tax credit has been availed by a
registered person in the return in FORM GSTR-3B for
a tax period in respect of such invoice or debit note, the details of which
have been furnished by the supplier in
the statement of outward supplies in FORM GSTR-1 or
using the invoice furnishing facility, but the return in FORM GSTR-3B for
the tax period corresponding to the said statement of outward supplies
has not been furnished by such supplier till the 30th
day of September following the end of financial year in which the input
tax credit in respect of such invoice or debit note has been availed, the said
amount of input tax credit shall be reversed by the said registered person,
while furnishing a return in FORM GSTR-3B on
or before the 30th day of November following the end of such financial year:
Provided that where the
said amount of input tax credit is not reversed by the registered person in a
return in FORM GSTR-3B on or before the
30th day of November following the end of such financial year during
which such input tax credit has been
availed, such amount shall be payable by the said person along with
interest thereon under section 50.
Provided further that where
the said supplier subsequently furnishes the return in FORM GSTR-3B for
the said tax period, the said registered person may re-avail the amount of such
credit in the return in FORM GSTR-3B for
a tax period thereafter.]
Rule 44. Manner of
reversal of credit under special circumstances.-
(1) The amount of input
tax credit relating to inputs held in stock, inputs contained in semi-finished
and finished goods held in stock, and capital goods held in stock shall, for
the purposes of sub-section (4) of section 18 or
sub-section (5) of section 29, be
determined in the following manner, namely,-
(a) for inputs held in stock and inputs contained in
semi-finished and finished goods held in stock, the input tax credit shall be
calculated proportionately on the basis of the corresponding invoices on which
credit had been availed by the registered taxable person on such inputs;
(b) for capital goods held in stock,the input tax credit
involved in the remaining useful life in months shall be computed on pro-rata
basis, taking the useful life as five years.
Illustration:
Capital goods have been
in use for 4 years, 6 month and 15 days.
The useful remaining
life in months= 5 months ignoring a part of the month
Input tax credit taken
on such capital goods= C
Input tax credit
attributable to remaining useful life= C multiplied by 5/60
1[(2) The amount, as
specified in sub-rule (1) shall be determined separately for input tax credit
of central tax, State tax, Union territory tax and integrated tax.
(3) Where the tax
invoices related to the inputs held in stock are not available, the registered
person shall estimate the amount under sub-rule (1) based on the prevailing
market price of the goods on the effective date of the occurrence of any of the
events specified in sub-section (4) of section 18 or, as the case may be, sub- section (5) of section 29.]
(4) The amount
determined under sub-rule (1) shall form part of the output tax liability of
the registered person and the details of the amount shall be furnished in FORM GST ITC-03,
where such amount relates to any event specified in sub-section (4) of section 18 and
in FORM GSTR-10,
where such amount relates to the cancellation of registration.
(5) The details
furnished in accordance with sub-rule (3) shall be duly certified by a practicing chartered accountant or cost accountant.
(6) The amount of input
tax credit for the purposes of sub-section (6) of section 18 relating
to capital goods shall be determined in the same manner as specified in clause
(b) of sub-rule (1) and the amount shall be determined separately for input tax
credit of 2[Central tax, State tax, Union territory tax and
integrated tax]:
Provided that where the amount so
determined is more than the tax determined on the transaction value of the
capital goods, the amount determined shall form part of the output tax
liability and the same shall be furnished in FORM GSTR-1 .
Rule 44A. Manner of
reversal of credit of Additional duty of Customs in respect of Gold dore bar. -
The credit of Central
tax in the electronic credit ledger taken in terms of the provisions of section 140 relating
to the CENVAT Credit carried forward which had accrued on account of payment of
the additional duty of customs levied under sub-section (1) of section 3 of the
Customs Tariff Act, 1975 (51 of 1975), paid at the time of importation of
gold dore bar, on the stock of gold dore bar held on the 1st day of July,
2017 or contained in gold or gold jewellery held
in stock on the 1st day of July, 2017 made out of such imported
gold dore bar, shall be restricted to
one-sixth of such credit and five-sixth of such credit shall be debited from
the electronic credit ledger at the time of supply of such gold dore bar or the gold or the gold jewellery made therefrom and where such supply has
already been made, such debit shall be within one week from the date of
commencement of these Rules.]
SECTION
1.
Section 16(3)
Circumstances
Depreciation under the Income Tax Act
has been claimed on the GST component of capital goods purchased
When is ITC reversal required
Reversal is required at the time of
closing books of accounts for that financial year.
2.
Section
17. Apportionment of credit and blocked credits
(1) Where the goods or
services or both are used by the registered person partly for the purpose of
any business and partly for other purposes, the amount of credit shall be
restricted to so much of the input tax as is attributable to the purposes of
his business.
(2) Where the goods or
services or both are used by the registered person partly for effecting taxable
supplies including zero-rated supplies under this Act or under the Integrated
Goods and Services Tax Act and partly for effecting exempt supplies under the
said Acts, the amount of credit shall be restricted to so much of the input tax
as is attributable to the said taxable supplies including zero-rated supplies.
(3) The value of exempt
supply under sub-section (2) shall be such as may be prescribed, and shall include supplies on which the recipient
is liable to pay tax on reverse charge basis, transactions in securities, sale
of land and, subject to clause (b) of paragraph 5 of Schedule II,
sale of building.
[Explanation.- For the purposes
of this sub-section, the expression "value of exempt supply" shall
not include the value of activities or transactions specified in Schedule III, 4[except,—
(i) the value of
activities or transactions specified in paragraph 5 of the said Schedule; and
(ii) the value of such
activities or transactions as may be prescribed in respect of clause (a) of
paragraph 8 of the said Schedule.];]
(4) A banking company or
a financial institution including a non-banking financial company, engaged in
supplying services by way of accepting deposits, extending loans or advances
shall have the option to either comply with the provisions of subsection (2),
or avail of, every month, an amount equal to fifty per cent. of the eligible input
tax credit on inputs, capital goods and input services in that month and the
rest shall lapse:
Provided that the option once
exercised shall not be withdrawn during the remaining part of the financial
year:
Provided further that the
restriction of fifty per cent. shall not apply to the tax paid on supplies made
by one registered person to another registered person having the same Permanent
Account Number.
(5) Notwithstanding
anything contained in sub-section (1) of section 16 and
sub-section (1) of section 18,
input tax credit shall not be available in respect of the following, namely:-
[(a) motor vehicles
for transportation of persons having approved seating capacity of not more than
thirteen persons (including the driver), except when they are used for making
the following taxable supplies, namely:-
(A) further supply
of such motor vehicles; or
(B) transportation of
passengers; or
(C) imparting training
on driving such motor vehicles;
(aa) vessels and
aircraft except when they are used-
(i) for making the
following taxable supplies, namely:-
(A) further supply of
such vessels or aircraft; or
(B) transportation of
passengers; or
(C) imparting training
on navigating such vessels; or
(D) imparting training
on flying such aircraft;
(ii) for transportation
of goods;
(ab) services of general
insurance, servicing, repair and maintenance in so far as they relate to motor
vehicles, vessels or aircraft referred to in clause (a) or clause (aa):
Provided that the input tax
credit in respect of such services shall be available-
(i) where the motor
vehicles, vessels or aircraft referred to in clause (a) or clause (aa) are used
for the purposes specified therein;
(ii) where received by a
taxable person engaged-
(I) in the manufacture
of such motor vehicles, vessels or aircraft; or
(II) in the supply of
general insurance services in respect of such motor vehicles, vessels or
aircraft insured by him;]
(b) 3[the following
supply of goods or services or both-
(i) food and beverages,
outdoor catering, beauty treatment, health services, cosmetic and plastic
surgery, leasing, renting or hiring of motor vehicles, vessels or aircraft
referred to in clause (a) or clause (aa) except when used for the purposes
specified therein, life insurance and health insurance:
Provided that the input tax
credit in respect of such goods or services or both shall be available where an
inward supply of such goods or services or both is used by a registered person
for making an outward taxable supply of the same category of goods or services
or both or as an element of a taxable composite or mixed supply;
(ii) membership of a
club, health and fitness centre; and
(iii) travel benefits
extended to employees on vacation such as leave or home travel concession:
Provided that the input tax
credit in respect of such goods or services or both shall be available, where
it is obligatory for an employer to provide the same to its employees under any
law for the time being in force.]
(c) works contract
services when supplied for construction of an immovable property (other than
plant and machinery) except where it is an input service for further supply of
works contract service;
(d) goods or services or
both received by a taxable person for construction of an immovable property
(other than plant or machinery) on his own account including when such goods or
services or both are used in the course or furtherance of business.
Explanation.-For the purposes of
clauses (c) and (d), the expression "construction" includes
re-construction, renovation, additions or alterations or repairs, to the extent
of capitalisation, to the said immovable property;
(e) goods or services or
both on which tax has been paid under section 10;
(f) goods or services or
both received by a non-resident taxable person except on goods imported by him;
[(fa) goods or services
or both received by a taxable person, which are used or intended to be used for
activities relating to his obligations under corporate social responsibility
referred to in section 135 of the Companies Act, 2013;]
(g) goods or services or
both used for personal consumption;
(h) goods lost, stolen,
destroyed, written off or disposed of by way of gift or free samples; and
(i) any tax paid in
accordance with the provisions of sections 74, 129 and 130.
(6) The Government
may prescribe the manner in which the credit referred to in sub-sections (1)
and (2) may be attributed.
Explanation.- For the purposes of this
Chapter and Chapter VI, the expression "plant and machinery" means
apparatus, equipment, and machinery fixed to earth by foundation or structural
support that are used for making outward supply of goods or services or both
and includes such foundation and structural supports but excludes-
(i) land, building or
any other civil structures;
(ii) telecommunication
towers; and
(iii) pipelines laid
outside the factory premises.
Comments
Post a Comment