Input Tax Credit | Explore the limitations of ITC for taxable persons under the composition scheme, where they are not eligible to claim it. Stay informed
A Customer who buys goods from a taxable person who is under composition scheme – IS NOT ELIGIBLE FOR ITC.
- Interstate self supplies such as stock transfer will be TAXABLE.
- However, Intra state self supplies are NOT TAXABLE.
- Business Assets put to a private or no – business use without consideration WILL BE TREATED AS SUPPLY.
- Job worker would be supplier of services, and required to obtain registration if his aggregate turnover exceeds the prescribed threshold.
Input Goods
- ITC of input goods used in supply eligible.
- No ITC of tax on petroleum products and liquor.
- Input going waste during manufacture eligible.
- ITC not available if no output GST is payable.
- Different treatment for capital goods.
- Goods used for personal consumption of employees not eligible.
Capital Goods
- Definition same as per cenvat credit rule.
- ITC of CG as defined only to manufacturer.
- Office Equipment – ( NOT ELIGIBLE FOR ITC )
- Construction of office building and factory – ( NO ITC )
- ITC on motor vehicles only to dealers of motor vehicles or used in manufacturer or transporter or training institutes.
- Dep on GST portion should not be availed.
- Removal of capital goods – GST Payable.
Input Services
- Services primarily for personal consumption of employees – NOT Eligible
- Services for construction of office building and factory – NOT Eligible