GST Input Tax Credit Reconciliation
GST is an indirect tax levied on goods and services based on the principle of value addition. Hence, the levy of tax is based on the value added at each stage of the supply chain till the product or service reaches the ultimate consumer. In such a tax system, to negate the cascading effect of the tax, there exists a means to set of taxes paid on procurement of raw materials, consumables, plant and machinery, equipment, services, etc., that are used for the manufacturing or supply of goods and services. This element used to offset the tax liability is called input tax credit.
GST input tax credit can be used to make GST payment by persons having GST registration. Automatically track input tax credit received and defaulted by suppliers.
It usually takes 5 to 7 working days.
- Session with TAXAJ Expert
- Prepare the Summary Report as per the data shared
- Reconcile the same with GSTR 2A
- Any & All Businesses registered under GST
- Purchase of Plan
- Expert Assigned
- Upload documents on vault
- Preparation & reconciliation of data from Actual with GSTR 2A
Invoices for the period.
- What is the eligibility for claiming GST Input Tax Credit ?
Input tax credit can be claimed only by a person having GST registration and based on proper documentation and filing of GSTR-2 returns. The following documentary requirements must be satisfied by a taxpayer for claiming input tax credit.
- An invoice issued by the Supplier as per the GST Rules for Invoice; or
- A debit note issued by a supplier; or
- A bill of entry or any similar document; or
- An ISD invoice or ISD credit note or any document issued by an Input Service Distributor.
In addition, the following conditions are also applicable for claiming input tax credit:
- The taxpayer is in possession of a tax invoice or debit note issued by a registered supplier or other tax paying documents.
- The taxpayer has received the goods and/or services.
- The tax charged in respect of the supply has been actually paid to the account of the appropriate Government, in cash or through utilisation of available input tax credit.
- The taxpayer has filed the the necessary GST filings.
- What are the Products or Services not eligible for Input Tax Credit ?
- Motor vehicles, except when they are supplied in the course of business or used for providing taxable services like:
- Transportation of passengers
- Transportation of goods
- Providing training on driving, fling, navigating such vehicles
- Further supply of such vehicles or conveyance
- Supply of goods and/or services in relation to food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery except where such inward supply of goods or services of a particular category is used by a registered taxable person for making an outward taxable supply of the same category of service
- Membership of a club, health and fitness centre
- Rent a cab, life insurance, health insurance, except where it is statutorily obligatory for an employer to provide such services
- Travel benefits extended to employees on vacation such as leave or home travel concession
- Goods and/or services received by the principal in the construction of immovable property, other than plant and machinery except where it is an input service for supply of works contract service
- Goods and services received by a taxable person for construction of an immovable property on his own account, other than plant and machinery, even when used in the furtherance of business
- Goods and services on which tax has been paid under composition scheme
- Goods and services used for personal consumption
- Goods lost, stolen, written off or disposed by way of gift or free samples
- Tax paid after detection of fraud, wilful misstatement or suppression
- Tax paid for release of detained or seized goods
- Tax paid for release of confiscated goods