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

Input Tax Credit

Input Tax Credit