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Explain the hierarchy and rules of utilization of Input Tax Credit (ITC)? |
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Answer» a. Accounts would be settled periodically between the Centre and the States to ensure that the credit of SGST used for discharge of IGST is transferred to the consumer state. b. The IGST used for payment of SGST would be transferred by the Centre to the Importing State. Further the SGST portion of IGST collected on B2C supplies would also be transferred by the Centre to the destination State. c. The transfer of funds would be carried out on the basis of information contained in the Returns filed by the taxpayers. d. ITC cannot be availed on invoices more than one year old. e. The ITC of tax paid on goods and/or services used for making taxable supplies by a taxable person (receiver) will be allowed subject to four conditions: i. He is in possession of tax invoice. ii. He has received the goods or services. iii.Tax has been actually paid by supplier to Government. iv. The valid return is filed under section 39. |
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