\n| Amount payable towards disposal of machinery is higher of (A) and (8)<\/td>\n | 1,37,700<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n ![\"Input](\"https:\/\/gstguntur.com\/wp-content\/uploads\/2021\/10\/GST-Guntur.png\") <\/p>\n
Question 2.
\nHarshgeet Pvt. Ltd. a registered supplier is engaged in the manufacture of taxable goods. The company provides the following information pertaining to GST paid on the purchases made\/input services availed by it during the month of July, 2018 :<\/p>\n \n\n\n| Sr. No.<\/td>\n | Particulars<\/td>\n | GST Paid<\/td>\n<\/tr>\n | \n| (1)<\/td>\n | Raw Material (To be received in September, 2018)<\/td>\n | 2,50,000<\/td>\n<\/tr>\n | \n| (2)<\/td>\n | Membership of a club availed for employees working in the factory<\/td>\n | 1,45,000<\/td>\n<\/tr>\n | \n| (3)<\/td>\n | Inputs to be received in 5 lots, out of which 3rd lot was received during the month.<\/td>\n | 80,000<\/td>\n<\/tr>\n | \n| (4)<\/td>\n | Trucks used for transport of raw material<\/td>\n | 40,000<\/td>\n<\/tr>\n | \n| (5)<\/td>\n | Capital Goods (out of 3 items, invoice for 2 items is missing and GST paid on that item is \u20b9 80,000.)<\/td>\n | 1,50,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Determine the amount of Tax Credit available with Harshgeet Pvt. Ltd. for the month of July, 2018 by giving the necessary explanation for treatment of various items. All the conditions necessary for availing the ITC have been fulfilled. [Nov. 2018 Old Course, 5 Marks]
\nAnswer:
\nComputation of ITC available with Harshgeet Pvt. Ltd. for the month of July, 2018<\/p>\n \n\n\n| Particulars<\/td>\n | Note<\/td>\n | GST Paid<\/td>\n<\/tr>\n | \n| Raw Material<\/td>\n | (1)<\/td>\n | Nil<\/td>\n<\/tr>\n | \n| Membership of a club availed for employees working in the factory<\/td>\n | (2)<\/td>\n | Nil<\/td>\n<\/tr>\n | \n| Inputs to be received in 5 lots<\/td>\n | (3)<\/td>\n | Nil<\/td>\n<\/tr>\n | \n| Trucks used for transport of raw material<\/td>\n | (4)<\/td>\n | 40,000<\/td>\n<\/tr>\n | \n| Capital Goods<\/td>\n | (5)<\/td>\n | 1,50,000<\/td>\n<\/tr>\n | \n| Total ITC available<\/td>\n | <\/td>\n | 1,10,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Notes:<\/p>\n \n- ITC not available as raw material is not received in July, 2018<\/li>\n
- Blocked credit in terms of section 17(5) of the CGST Act, 2017<\/li>\n
- In case of goods received in lots, ITC can be taken only upon receipt of the last lot<\/li>\n
- ITC of GST paid on motor vehicles is allowed only when used, interalia, for transportation of goods in terms of section 17(5) of the CGST Act, 2017<\/li>\n
- ITC of GST paid on items for which invoice is missing is not available. So, ITC of \u20b9 80,000 is not available<\/li>\n<\/ol>\n
<\/p>\n Question 3.
\nJamku Ltd. a registered person is engaged in the business of spices. It provides following details for GST paid during October, 2018:<\/p>\n \n\n\n| SI. No.<\/td>\n | Particulars<\/td>\n | GST paid (\u20b9)<\/td>\n<\/tr>\n | \n| 1<\/td>\n | Raw spices purchased:<\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | \u2666 Raw spices used for furtherance of business<\/td>\n | 50,000<\/td>\n<\/tr>\n | \n| <\/td>\n | \u2666 Raw spices used for personal use of Directors<\/td>\n | 20,000<\/td>\n<\/tr>\n | \n| 2<\/td>\n | Electric machinery purchased to be used in the manufacturing process.<\/td>\n | 25 000<\/td>\n<\/tr>\n | \n| 3<\/td>\n | Motor vehicle used for transportation of the employee<\/td>\n | 55,000<\/td>\n<\/tr>\n | \n| 4<\/td>\n | Payment made for material and to contractor for construction of staff quarter<\/td>\n | 1,25,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Determine the amount of ITC available to Jamku Ltd. for the month of October, 2018 with all related workings and explanations.
\nAll the conditions necessary for availing the ITC have been fulfilled. [May 2019 Old Course, 4 Marks]
\nAnswer:
\nComputation of ITC available with Jamku Ltd. for the month of October, 2018<\/p>\n \n\n\n| Particulars<\/td>\n | Note<\/td>\n | ITC (\u20b9)<\/td>\n<\/tr>\n | \n| Purchase of Raw spices for furtherance of business<\/td>\n | (1)<\/td>\n | 50,000<\/td>\n<\/tr>\n | \n| Purchase of Raw spices for personal use of Directors<\/td>\n | (2)<\/td>\n | Nil<\/td>\n<\/tr>\n | \n| Electric machinery purchased to be used in the manufacturing process.<\/td>\n | (1)<\/td>\n | 25,000<\/td>\n<\/tr>\n | \n| Motor vehicle used for transportation of the employee<\/td>\n | (3)<\/td>\n | Nil<\/td>\n<\/tr>\n | \n| Payment made for material and to contractor for construction of staff quarter<\/td>\n | (4)<\/td>\n | Nil<\/td>\n<\/tr>\n | \n| Total ITC available for the month October, 2018<\/td>\n | <\/td>\n | 75,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Notes:
\n(1) Every registered person is entitled to take credit of input tax charged on any supply of goods to him which are used or intended to be used in the course or furtherance of his business.<\/p>\n (2) ITC is not available on goods used for personal consumption.<\/p>\n (3) ITC on motor vehicles can be availed, inter alia, when they are used for making the taxable supply of transportation of passengers. In the given case, since the supplier is in the business of spices, it cannot avail credit on motor vehicle used for transportation of the employee. Thus, ITC on motor vehicle used for transportation of the employee is blocked credit.<\/p>\n (4) ITC is not available on 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.<\/p>\n <\/p>\n Question 4.
\nDina Ltd., a registered supplier from Maharashtra, is in the manufacturing of Passenger auto. The company provides the following details of purchases made\/services availed by it during the month of March 2019:<\/p>\n \n\n\n| Sl. No.<\/td>\n | Particulars<\/td>\n | GST Paid (\u20b9)<\/td>\n<\/tr>\n | \n| i<\/td>\n | Purchase of Iron which is as a raw material [Goods were received in two instalments, first one in March 2019 and the second instalment was received in April 2019]<\/td>\n | 2.50,000<\/td>\n<\/tr>\n | \n| ii<\/td>\n | Purchase of accessories which were delivered directly to the Dealers of the company. Only invoice was received by Dina Ltd.<\/td>\n | 90,000<\/td>\n<\/tr>\n | \n| iii<\/td>\n | Purchase of Bus (Seating capacity 15) for the transportation of employees from their residence to company and back<\/td>\n | 1,97,000<\/td>\n<\/tr>\n | \n| iv<\/td>\n | Input tax credit on general insurance taken on a car used by Executives of the company for official purposes<\/td>\n | 5,200<\/td>\n<\/tr>\n | \n| v<\/td>\n | Payment made to M\/s Tasty Caterers for providing daily breakfast & lunch to the employees of the company, as a voluntary staff welfare measure<\/td>\n | 54,700<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n You are required to determine the eligible Input Tax Credit available to M\/s. Dina Ltd. for the month of March 2019, by giving brief explanations for treatment of various items. Subject to the information given above. All the other conditions necessary for availing input tax credit have been fulfilled. [Nov. 2019 Old Course, 5 Marks]
\nAnswer:
\nComputation of input tax credit (ITC) available with Dina Ltd. for the month of March 2019<\/p>\n \n\n\n| Particulars<\/td>\n | Note<\/td>\n | ITC (\u20b9)<\/td>\n<\/tr>\n | \n| Purchase of Iron which is as a raw material<\/td>\n | (1)<\/td>\n | ‘ Nil<\/td>\n<\/tr>\n | \n| Purchase of accessories which were delivered directly to the Dealers of the company<\/td>\n | (2)<\/td>\n | 90,000<\/td>\n<\/tr>\n | \n| Bus for the transportation of employees from their residence to company and back<\/td>\n | (3)<\/td>\n | 1,97,000<\/td>\n<\/tr>\n | \n| General insurance taken on a car used by Executives of the company for official purposes<\/td>\n | (4)<\/td>\n | Nil<\/td>\n<\/tr>\n | \n| Payment made to M\/s Tasty Caterers for providing daily breakfast & lunch to the employees of the company<\/td>\n | (5)<\/td>\n | Nil<\/td>\n<\/tr>\n | \n| Total ITC available for the month October, 2018<\/td>\n | <\/td>\n | 2,87,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Notes:
\n(1) When inputs are received in instalments, ITC can be availed only on j the receipt of last instalment. Hence, since last instalment is received j in April 2019, ITC cannot be availed in March 2019.<\/p>\n (2) Goods delivered to another person on the direction of the registered person by way of transfer of documents of title or otherwise, either ; before or during the movement, are deemed to have been received by such registered person. Thus, ITC is available to the registered person, on whose order\/direction the goods are delivered to a third person.<\/p>\n (3) ITC on motor vehicles for transportation of persons with seating capacity more than 13 persons (including the driver) used for any purpose is allowed.<\/p>\n (4) ITC on motor vehicles for transportation of persons with seating capacity less than or equal to 13 persons (including the driver) is blocked except when the same are used for (i) making further taxable supply of such motor vehicles (ii) making taxable supply of transportation of passengers (iii) making taxable supply of imparting training on driving such motor vehicles. Further, ITC is not allowed on services of general insurance relating to such ineligible motor vehicles.<\/p>\n Since, the car is not used for any of the eligible purposes, ITC thereon is blocked and thus, ITC on general insurance taken on such car is also blocked.<\/p>\n (5) ITC on outdoor catering is blocked except (i) in the case of sub-contracting, ie. when such service is used by the taxpayer who is in the same line of business (ii) when such service is provided by the employer to its employees under a statutory obligation.<\/p>\n Since the company is not an outdoor caterer and it is providing such services to its employees as a voluntary staff welfare measure, ITC on such outdoor catering services is blocked.<\/p>\n <\/p>\n Question 5.
\nDocuments based on which ITC is taken should contain at least certain details. What are they? [Nov. 2019 Old Course, 4 Marks]
\nAnswer:
\nThe documents based on which ITC is taken should contain at least the following details:<\/p>\n \n- Amount of tax charged<\/li>\n
- Description of goods or services<\/li>\n
- Total value of supply of goods and\/or services<\/li>\n
- GSTIN of the supplier and recipient<\/li>\n
- Place of supply in case of inter-State supply<\/li>\n<\/ol>\n
Question 6.
\nFun Pharma Private Limited, a registered supplier is engaged in the manufacture of taxable goods. The company provides the following information of GST paid on the purchases made\/input services availed by it during the month of September 2017:<\/p>\n \n\n\n| <\/td>\n | Particulars<\/td>\n | Amount (\u20b9)<\/td>\n<\/tr>\n | \n| (i)<\/td>\n | Purchase of cabs used for the transportation of its employees<\/td>\n | Nil<\/td>\n<\/tr>\n | \n| (ii)<\/td>\n | Inputs consisting of three lots, out of which first lot was received during the month<\/td>\n | Nil<\/td>\n<\/tr>\n | \n| (iii)<\/td>\n | Capital Goods<\/td>\n | 2,50,000<\/td>\n<\/tr>\n | \n| (iv)<\/td>\n | Outdoor catering service availed on Women\u2019s day<\/td>\n | Nil<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Determine the amount of Input Tax Credit available with M\/s Fun Pharma Private Limited for the month of September 2017 by giving necessary explanations of treatment of various items. All the conditions necessary for availing the input tax credit have been fulfilled. [May 2018, 4 Marks]
\nAnswer:
\nComputation of input tax credit (ITC) available with Fun Pharma Private Limited
\n(for the month of September, 2017)<\/p>\n \n\n\n| Particulars<\/td>\n | Note<\/td>\n | Amount (\u20b9)<\/td>\n<\/tr>\n | \n| Purchase of cabs used for the transportation of its employees<\/td>\n | (1)<\/td>\n | Nil<\/td>\n<\/tr>\n | \n| Inputs consisting of three lots, out of which first lot was received during the month<\/td>\n | (2)<\/td>\n | Nil<\/td>\n<\/tr>\n | \n| Capital Goods<\/td>\n | (3)<\/td>\n | 2,50,000<\/td>\n<\/tr>\n | \n| Outdoor catering service availed on Women\u2019s day<\/td>\n | (4)<\/td>\n | Nil<\/td>\n<\/tr>\n | \n| Total ITC<\/td>\n | <\/td>\n | 2,25,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Notes:
\n(1) Section 17 of CGST Act, 2017 provides that ITC on motor vehicles can be availed, inter alia, when they are used for making the taxable supply of transportation of passengers ie., if the taxable person is in the business of transport of passengers. In the given case, since the supplier is a manufacturer, it cannot avail credit on cabs used for transportation of its employees.<\/p>\n (2) When inputs are received in instalments, ITC can be availed only on receipt of last instalment in terms of section 16 of CGST Act, 2017.<\/p>\n (3) ITC cannot be taken on missing invoice. The registered person should have the invoice in its possession to claim ITC vide section 16 of CGST Act, 2017.<\/p>\n (4) ITC on outdoor catering is specifically disallowed unless the same is used for making outward taxable supply of the same category or as an element of the taxable composite or mixed supply in terms of section 17 of CGST Act, 2017.<\/p>\n <\/p>\n Question 7.
\nCANWIN Ltd., a registered supplier, is engaged in the manufacture of Tanks. The company provides the following information pertaining to GST paid on the purchases made\/input services availed by it during the month of January 2018:<\/p>\n \n\n\n| <\/td>\n | Particulars<\/td>\n | Amount in (\u20b9?)<\/td>\n<\/tr>\n | \n| (i)<\/td>\n | Purchase of Machinery where debit note is issued<\/td>\n | 1,15,000<\/td>\n<\/tr>\n | \n| (ii)<\/td>\n | Input purchased was directly delivered to Mr. Joe, a job worker and a registered supplier<\/td>\n | 80,000<\/td>\n<\/tr>\n | \n| (iii)<\/td>\n | Computers purchased (Depreciation was claimed on the said GST portion under the Income-Tax Act, 1961)<\/td>\n | 50,000<\/td>\n<\/tr>\n | \n| (iv)<\/td>\n | Works Contract services availed for construction of Staff quarters within the company premises<\/td>\n | 4,25,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Determine the amount of ITC available to M\/s. CANWIN Ltd. for the month of January 2018 by giving brief explanations for treatment of various items. Subject to the information given above, all the conditions necessary of availing the ITC have been fulfilled. [Nov. 2018, 4 Marks]
\nAnswer:
\nComputation of input tax credit (ITC) available with CANWIN Ltd. for the month of January 2018<\/p>\n \n\n\n| Particulars<\/td>\n | Note<\/td>\n | Amount in (\u20b9)<\/td>\n<\/tr>\n | \n| Purchase of Machinery w here debit note is issued<\/td>\n | (1)<\/td>\n | 1,15,000<\/td>\n<\/tr>\n | \n| Input purchased was directly delivered to Mr. Joe, a job worker and a registered supplier<\/td>\n | (2)<\/td>\n | 80,000<\/td>\n<\/tr>\n | \n| Computers purchased and depreciation was claimed on the GST portion<\/td>\n | (3)<\/td>\n | Nil<\/td>\n<\/tr>\n | \n| Works Contract services availed for construction of Staff quarters within the company premises<\/td>\n | <\/td>\n | Nil<\/td>\n<\/tr>\n | \n| Total ITC<\/td>\n | <\/td>\n | 1,95,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n <\/p>\n Notes:<\/p>\n \n- Input tax credit on goods purchased on the basis of debit note which is a valid document is allowed.<\/li>\n
- Where depreciation has been claimed on the tax component of the cost of capital goods and plant and machinery under the provisions of the Income-tax Act, 1961, the input tax credit on the said tax component is not allowed.<\/li>\n
- Input tax credit on works contract services supplied for construction of an immovable property is specifically disallowed except where it is an input service for further supply of works contract service.<\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"
Input Tax Credit \u2013 CA Inter Tax Study Material is designed strictly as per the latest syllabus and exam pattern. Input Tax Credit \u2013 CA Inter Taxation Study Material Question 1. Bharat Associates Pvt. Ltd. purchased machinery worth \u20b9 9,00,000 (excluding GST) on 20-07-2017 on which it paid GST @ 18%. It availed the ITC. …<\/p>\n Input Tax Credit \u2013 CA Inter Tax Study Material<\/span> Read More »<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":""},"categories":[167],"tags":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/posts\/13896"}],"collection":[{"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/comments?post=13896"}],"version-history":[{"count":1,"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/posts\/13896\/revisions"}],"predecessor-version":[{"id":13899,"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/posts\/13896\/revisions\/13899"}],"wp:attachment":[{"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/media?parent=13896"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/categories?post=13896"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/tags?post=13896"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}} | | | | | | | | | | |