PRESENTATION FOR TRADE AND TAX DEPARTMENT, DELHI BY SUSHIL

Report
Presented By
CA Swatantra Singh,
B.Com , FCA, MBA
Email ID: [email protected]
New Delhi , 9811322785,
www.caindelhiindia.com,
www.carajput.com
1
Input Tax Credit
1. WHAT IS INPUT TAX CREDIT (ITC)
The concept of ITC is to replace declaration forms and to
collect tax at multi-point. ITC, in general, is the
a. Section 9(1) is subject to section 9(2).
b. amount of tax paid/payable by the purchaser in accordance
with the provisions of the Act
c. on eligible local purchase (not specified in Schedule VII)
d. arises in the course of his activity as a dealer
e. from a local regd. dealer supported by a ‘valid tax invoice’
e. for the purpose of use by him directly/indirectly in making
Local Taxable Sales or inter-State Sale or Export out of India.
2
Input Tax Credit
b.ELIGIBLE TAX (for which credit is available):  Tax paid under DVAT Act in relation to eligible purchases.
 Therefore no credit can be claimed for:  CST paid or payable on inter-state purchases;
 Central excise duty or service tax;

Any tax (other than DVAT), whatsoever, paid or
payable to the home State or other states or UT.
c. ELIGIBLE DEALERS:  Registered under the DVAT
 Required to be registered under the DVAT Act
 Exception - Casual dealer and Composition Dealer
3
Input Tax Credit
d.
ELIGIBLE Goods (for which credit is available): -
 Trading Goods;
 Raw Materials;
 Packing Material;
 Consumables other than fuel;
 Hire charges subjected to DV AT (Except contractors);
 Capital Goods (unless specified in Schedule V II) subject
to restrictions specified under section 9(9);
 Components used in fabricating the machine in-house
provided machine is used for purposes specified u/ s 9(9)
4
Input Tax Credit
e.
ELIGIBLE PURCHASES IN GENERAL
 Goods purchased for the purpose of business and not for
personal consumption;
 Goods purchased for the purpose of manufacturing taxable
goods, e.g., ITC is not allowed on paper purchased for
manufacturing books;
 Goods not purchased from a casual dealer or a dealer who
has opted for the composition scheme;
 Goods purchased for the purpose of making –

Local taxable sales; Inter-State sales; Exports
5
Input Tax Credit
• ITC u/s 9 is available on making the eligible
purchases – Holding of tax invoice without making
the purchase is not enough
• If, under some circumstances, the local purchases
are assessed as central purchases, Input Tax
Credit would be denied – To illustrate – K.G.
Khosla’s case and DCM case
• Therefore, first ensure that goods are actually been
purchased and, second, this is a local purchase
6
Input Tax Credit
f.
Non-Creditable Goods

Items are not specified in Schedule VII – It is an
exhaustive list, amended further w.e.f. 30.11.2005 –

All Automobiles and spare parts for repairs and
maintenance and tyres and tubes thereof;

Fuels in the form of petrol, diesel and kerosene,
LPG, CNG, PNG, coal;

Conventional clothing and footwear, clothing
fabrics;

Food and beverages for human consumption;

TV, DVD, Music systems, etc. – Equipments for
entertainment;
7
Input Tax Credit
f.
Non-Creditable Goods (contd…)
 Air conditioners, air conditioning plants or units other
than those used for manufacturing purposes; air
coolers, fans and air circulators;
 Office equipments, furniture, carpets, stationary items,
advertisement and publicity materials, sanitation
equipments, fixtures including electrical fixtures and
fittings, generators and electrical installation;
 Elevators (lifts);
 Cranes, earthmovers, JCB, excavators, road rollers,
concrete mixing machines and other similar
machineries;
8
Input Tax Credit
f.
N on-Creditable Goods (contd…)
Computers other than those used for the
purpose in normal business;
Goods for personal consumption or for gifts;
Goods purchased and accounted for in business
but utilised for the facility to the employees;
Goods used for construction of or incorporation
in civil structures and immovable goods or
properties not constituting part of the works
contracts.
9
Watz VAT?
What is VAT
(1) Value Added Tax (VAT), as the name itself suggests,is a tax on
value addition at each stage of production - distribution chain.
(2) This tax, in its purest form, is a destination based , consumption tax.
It encompasses all economic activities .
(3) At each stage of trade, value addition is taxed and tax is paid on all
Purchases whether inputs, or capital investment .
(4) At each stage, there is collection of tax by government but , it is
rebated at the next stage.
(5) VAT system of taxation is considered to be superior to other
systems of taxation as it avoids/ reduces cascading effect of
indirect taxes.
(6) It is also simple to administer and has self – policing mechanism.
10
CHARACTERSTICS OF SALES TAX
 Lack of Uniformity.
 Multiplicity of Rates
 Heavy reliance on the First-point tax.
 Cascading effect of the tax.
 Pyramiding influence on prices.
 Biased against commodity having larger value-added at the
earliest stages.
11
BASIC CONCEPTS OF VAT
 VAT is a form of Sales Tax collected on consumer expenditure.
 It removes any tax on Business investment.
 Input is Purchase and Output is Sales.
 Input and Output are common to Manufacturers and Traders.
 Zero is a Rate of Tax in VAT.
 If transaction is Zero Rated, Seller is eligible for Input Tax Rebate.
 Exempt means no Input Rebate is given
12
INPUT TAX REBATE
 Manufacturers and Traders to get input tax rebate
against sales are made by them.
 Export Sales are eligible for input tax rebate
 Branch Transfers / Consignment Sales eligible for
subject to certain limits.
credit
Input Rebate is confined only to tax paid on Purchases
made WITHIN the state only.
13
RATES OF TAX
 Common Rates of Tax
 Basic Four Rates of Tax (1%, 4% , 12.50% and 20%)
 Minimum Rate. ( Bullion, Gold, Silver, Precious Metals
and stones)
 Low Rate. ( Food Grains , Declared Good and industrial
inputs)
 High Rate( Liquor, Petroleum Products)
 General Rate ( All other Goods)
14
Operation of VAT
Raw Material producer –Sale value 100
Gross VAT – 12.50 (12.50% of 100)
Net VAT – 12.50
Manufacturer – Sale value 200
Gross VAT - 25(12.50% of 200)
Net VAT
- 12.50 (25-12.50)
Wholesaler – Sale value 300
Gross VAT - 37.50 (12.50% of 300)
Net VAT - 12.50 (37.50-25)
Retailer
– Sale value 400
Gross VAT - 50 ( 12.50% of 400)
Net VAT - 12.50 (50-37.50)
15
Operation of Sales
Raw Material producer –Sale value 100
Gross Sales tax – 12.50 (12.50% of 100)
Net Sales Tax – 12.50
Manufacturer – Sale value 200
Gross Sales Tax – 25 (12.50% of 200)
Net Sales Tax - 25
Wholesaler – Sale value 300
Sales tax - NIL
Retailer
– Sale value 400
Sales Tax - NIL
16
Registration
Every Dealer is required to register under the act if he fulfills
any of these conditions :
His taxable turnover in the preceding year exceeded the
minimum exemption limit.
His taxable turnover in the current year exceeds the
exemption limit.
He is liable to pay tax under CST,1956.
A Dealer is exempted from registration if he deals
exclusively in goods which are exempted under VAT.
17
TIN NO. & TIN Design
(1) Automatic registration of existing taxpayers under VAT by
allotment of TIN without making application or payment of
any fee
(2) Website query system developed for generating TIN from
old R.C. No.
(3) 11-digit TIN made user friendly.
v 2-digit state code ,
v 2 check digits,
v 7-digit serial no. split into two parts:
v 2-digit district code
v 5-digit old R.C. No. retained.
18
Composition Scheme
If the turnover of dealer exceeds the taxable quantum
but does not exceed the prescribed amount , then he can
opt for composition scheme.
Rate of Tax under this scheme is 1% .
Such dealers are not entitled to claim input tax credit.
They are not entitled to collect tax from customers.
They are not entitled to issue tax invoices.
They are required to hold and retain tax invoices as well
as retail invoices for all their purchases.
19
Composition Scheme
If the turnover of dealer exceeds the taxable quantum but does not
exceed the prescribed amount , then he can opt for composition
scheme.
Rate of Tax under this scheme is 1% .
Such dealers are not entitled to claim input tax credit.
They are not entitled to collect tax from customers.
They are not entitled to issue tax invoices.
They are required to hold and retain tax invoices as well as retail
invoices for all their purchases.
A dealer is not eligible for Composition scheme if he meets any of
the below mentioned criterion:
i.
Is registered under the CST Act
ii.
He purchases goods from unregistered dealer
iii.
Procures goods from outside Delhi
iv.
Sells or supplies goods to any place outside Delhi
20
Tax Credit on Opening Stock
Any Opening Stock as on 1st April’05 is eligible
for tax credit subject to the following conditions:
It should be held in the respective state only.
Statement in a prescribed form is furnished with the deptt.
within a stipulated period .
In case of Raw/Packing material it is purchased after a given
date
No tax credit shall be allowed on Finished Goods that were
taxable at last point.
Any dealer who has opted under Composition Scheme will be
required to pay tax on the trading stock, Raw materials,
Packaging materials and Finished Goods held in stock as on 1st
April’2005.
21
Invoices Vs Tax invoice
Under VAT invoices hold a primary place as these are the basic
documents on the basis of which the whole system has been
designed .There are two kind of Invoices :
TAX INVOICE
RETAIL INVOICE
A tax invoice can be issued ONLY by a registered dealer.
Any dealer who elects to pay under Composition Scheme or makes
Central sales or Exports is not required to issue a tax invoice.
Tax Credit can be claimed by the purchaser only if he holds a valid
tax invoice.
A tax invoice shall be issued in Duplicate –The original one for the
Purchaser and the duplicate for the seller
22
Mandatory particulars of Tax Invoice
The word “Tax Invoice” in a prominent place
The name, address and registration number of the selling registered dealer
The name, address and registration number of the purchasing registered dealer
Serial No. of the invoice and the date on which it is issued
Description, quantity, volume and value of goods sold and services provided and
the amount of tax charged thereon to be indicated separately
The signature of the selling Dealer or his servant, manager or agent, duly
authorized by him.
The name and address of the printer and the 1st and last serial number of the tax
invoices printed and supplied by him to the dealer.
If an invoice has been issued under the provisions of the Central Excise Act ,it
shall be deemed to be a valid tax invoice only if it contains all the particulars
prescribed above.
In case of computerized invoices a series number should be maintained for all
invoices , the duplicate copy should be maintained securely , and in such a case the
dealer becomes the printer himself.
23
Retail Invoice
A retail invoice is issued by registered dealers for all sales valued above Rs.25
Retail invoices shall be issued in duplicate –the original for the purchaser and
duplicate for the seller
Retail invoices are also issued in case of interstate sales , interstate branch
transfers and exports
The words Retail Invoice/ Cash Memo/Bill in a prominent place
The name ,address and registration number of the dealer ,if registered.
In case of sale in the course of inter state trade or commerce, the name,
registration number and address of the purchasing dealer and the type of statutory
form, if any ,against which the sale has been made.
A pre-printed serial number and the date on which the invoice has been issued
Description, quantity, volume and value of goods sold and services provided
inclusive of the amount of tax charged thereon
The signature of the selling Dealer or his servant, manager or agent, duly
authorized by him.
24
Input Tax Credit
INPUT TAX CREDIT ON CAPITAL GOODS
• Capital goods means plant, machinery and equipments used
directly or indirectly in the process of trade, manufacturing
or works contracts in Delhi.
• But, ITC is not available on goods specified in Sch.VII.
• Goods must be purchased within Delhi from a registered
dealer, supported by a valid tax invoice.
• ITC is available in three equal instalments and first
installment is in the tax period when it is purchased.
• If capital goods are transferred out of Delhi within three
years, than 2% of the purchase price will be reversed. When
the goods are received back in Delhi, ITC could not be
reclaimed since rule 7(2) refers to non-capital goods and
sec. 9(6) of the Act.A big issue for works contractors.
25
Input Tax Credit
INPUT TAX CREDIT ON CAPITAL GOODS
• Depreciation will not be claimed on the amount of
ITC availed by the dealer, i.e., on the principal
amount.
• Tax credit in respect of capital goods shall also not
be allowed if such capital goods are used exclusively
for the purpose of making sale of exempted goods
specified in the first schedule.
• If capital goods are used partly for the purposes of
manufacturing and/or trading taxable goods or
making exports and partly for other purposes, the
amount of the tax credit in relation to such capital
goods shall be reduced proportionately.
26
Input Tax Credit
ADJUSTMENT IN INPUT TAX CREDIT
• If the invoice raised by the seller/contractor is passed by
buyer/contractee for a lesser amount, and the amount
is subsequently adjusted in output tax by contractor u/s
8, the seller must issue to the buyer a debit note,
issuance of which is mandatory.
• The buyer/contractee shall adjust his ITC on the basis
of such debit note
• Where goods are returned/rejected by the buyer, he
will reduce his ITC in relation to those goods, in the T.P.
when goods are returned/ rejected. Double taxation if
goods are returned after 6 month
27
Input Tax Credit
PROPORTIONATE REDUCTION IN INPUT TAX
CREDIT
• Where a dealer has purchased goods, which are to be
used partly for the purpose of making sales referred to
u/s 9(1) and partly for other purposes, then amount of
tax credit shall be reduced proportionately.
• To illustrate, X purchased raw material for Rs. 1,00,000
plus tax of Rs. 12500/- for manufacture of taxable as
well as exempted goods. At that time, he estimated
that the raw material would produce 80% taxable
goods. In such case, his input tax credit will be
restricted only to 80% of Rs. 12500/, i.e., Rs. 10000/-.
28
Input Tax Credit
PROPORTIONATE REDUCTION IN INPUT TAX
CREDIT
• If goods are subsequently used for different purposes,
then the reduction shall be made in the tax period when
so used.
• What is the difference between 9(4) and 10(2)
• Method of reduction should be fair and reasonable;
otherwise the Commissioner is empowered to reject
the method or prescribe another method.
29
Input Tax Credit
PROPORTIONATE REDUCTION IN INPUT TAX
CREDIT
• Valuation:
– If commodity wise register maintained – At the
purchase price
– Otherwise – On the basis of the purchase price of
such goods immediately preceding their use for other
purposes or their FMV, w.e.i. higher
30
Input Tax Credit
STOCK TRANSFER TO OTHER STATES
• The amount of the tax credit shall be reduced by 2%
of the purchase price (1% in case of bullion) if the
goods or goods manufactured out of such goods are
to be exported from Delhi by way of transfer to a
(i) non-resident consignment agent; or
(ii) non-resident branch of the dealer;
• ITC will be reduced only in relation to those goods
where it is claimed or is claimable, i.e., no reduction
shall be made in respect of those goods which are
purchased from local unregistered dealers or in the
course of inter-State trade.
31
Input Tax Credit
STOCK TRANSFER TO OTHER STATES
• What is the difference between 9(6) and 10(3)
• At what value goods to be transferred – At cost or at
FMV? It should be the cost since reversal to be made on
the basis of purchase price
• Valuation of stock transfer:
– If commodity wise register maintained – At the
purchase price
– Otherwise – On the basis of the purchase price of
such goods immediately preceding their use for stock
transfer or their FMV, w.e.i. higher
32
Input Tax Credit
STOCK TRANSFER TO OTHER STATES
• In addition, Form F shall also be obtained
• Where the goods so transferred are received back in
Delhi either in the original form or in some other
form, tax credit already reduced can be reclaimed in
the tax period when goods are so received.
33
Input Tax Credit
GOODS INCORPORATED IN OWN STRUCTURE
• If goods are used for construction of or incorporation in
civil structures and immovable goods or properties not
constituting part of the works contracts, ITC shall be
denied on such goods, e.g., cement, bricks, tiles, etc.
• If goods which have been purchased by a dealer were
intended to be used for the purposes specified u/s 9(1)
but are subsequently incorporated into the structure of a
building owned or occupied by that person, the tax credit
claimed in respect of such purchases shall be reduced in
the tax period during which such incorporation takes
place.
34
Input Tax Credit
GOODS LOST OR DESTROYED
• Where any goods or goods manufactured out of such
goods are lost or destroyed, the credit taken in any
earlier tax period shall be reversed in the tax period in
which goods are claimed to have been lost or destroyed.
• However, input tax credit should not be denied on
normal loss arising during the course of manufacture.
35
Input Tax Credit
Can ITC be claimed on the strength of ‘Retail Invoice’
instead of ‘Tax Invoice’ – if all other conditions are
satisfied –
• The answer depends whether the provisions of section
50(2) are directory or mandatory.
• If mandatory, ITC could be claimed only on the basis of
tax invoice.
36
Input Tax Credit
Can ITC be claimed in the tax period subsequent to the
tax period when goods were actually purchased,
without filing an objection, on the ground –
– He do not have in procession the Original Tax Invoice
when goods were purchased : Should state the amount
of purchase and claim ITC in subsequent months
– He forgot to claim ITC in the original tax period :
Since it is an error or mistake – Objection is required
37
Input Tax Credit-Traders
• Input Tax Credit can be claimed in respect of
– Purchases meant for local taxable sales, ISS and
Exports out of India
– Capital goods used in the process of trade such as
weighing machines, computers, delivery rickshaws, etc.
– Not available in respect of furniture/furnishing of office
• Schemes, distribution Gift articles, etc.?
• Reversal of input tax credit on account of credit notes?
• Evaporation Loss?
• Stock transfers to agents within Delhi ?
38
Input Tax Credit-Traders
Free Offers to the Customers – ITC on Purchases
•
Deter. u/s 84 dt. 31.10.2005 – L.G. Electronics – Gifts (Tshirts, TV, AC, Phone, etc.) to customers through
scratch cards – debited to sales promotion – No ITC
•
However, in our opinion, where gifts are given along
with the main product - Necessary for completion of
sale contracts – 2+1 shirt (or) Bucket with detergent
(or) Mosquito machine with mats (or) Car +
Accessories – Supply of free items is part of sale
contract – ITC should be available
•
To be debited to “purchases” instead “sale promotion”
•
Post sale gifts – No ITC/benefit of Form ‘C’ available
39
Input Tax Credit-Traders
•
Credit Note resulting in reduction of purchases –
Need reversal of ITC by the purchaser even if
output tax has not been reversed by the seller u/s
8 – Circular No. 2 dated 7.8.2008
However, Judgments to be referred for contrary answer:
Andhra Agencies vs. State of A.P. (2009) 19 VST 1 (SC)
Priya Agencies vs. CTO (2008) 14 VST 293 (Ker)
40
Input Tax Credit-Traders
Goods Lost – ITC on Purchases
•
Evaporation of oil – No ITC on oil evaporation –
Commissioner Ruling u/s 85 – Same opinion by P&H
High Court recently Bharat Petroleum Ltd.
• The same analogy might be applied to all trading losses. For
example –
• loss of cement in transit
• Waste/scrap generated at the end, e.g. confectionery powder,
vegetable/fruit waste at the end of the day
• Measurement/weighment difference in purchase vis-a-vis sale
41
Input Tax Credit-Traders
STOCK TRANSFER WITHIN DELHI
In accordance with Notification No. F.4(3)/P-II/Noti/ VAT/2005/1158 dated
2nd December 2005 • The principal in Delhi will raise tax invoice on agent; &
• The agent will claim ITC on the basis of such tax invoice.
However, if that is so, even without substantial provisions:
• Tax will have to be paid by the principal even without
affecting sale and adjustments to be made at the time of
return of unsold stock by the agent;
• ITC will be claimed by agent without making purchases.
42
Input Tax Credit-Manufacturers
Input Tax Credit can be claimed in respect of :-
– Purchases meant for manufacture of goods meant
local taxable sales, ISS and Exports out of India
including raw material and consumables
– Facilities, such as bulbs, exhaust fans, shoes, etc. used
in the manufacturing plant
– Status of goods manufactured at Third Party Unit –
(i) With material (some material supplied by Mfr.
and (ii) without material (purely labor)
43
Input Tax Credit-Manufacturers
• Input Tax Credit can be claimed in respect of
– Capital goods used in the process of manufacture
such as plant, machinery, tools, equipments,
weighing machines, etc. [ Judgments applicable to
purchase against form C squarely applies – except
goods listed in Sch.VII ]
• Normal Manufacturing Loss
• As per the Advance Ruling by the Commissioner,
where scrap generated out of goods manufactured is
exempt, then tax credit on the raw material shall be
reduced proportionately.
44
Input Tax Credit-Manufacturers
STOCK TRANSFER TO OTHER STATES
•
Where the goods so transferred are received back
in Delhi either in the original form or in some other
form, tax credit already reduced can be reclaimed
in the tax period when goods are so received.
•
Where a dealer, who is engaged in manufacturing of
taxable as well as exempt goods, transfers certain
goods to other States, then
– He will first reduce the ITC proportionately in
relation to the exempted goods; then
– He will further reduce the amount of ITC as
calculated in (i), in relation to stock transfer to
other States.
45
Input Tax Credit-Job Workers
• A person, who is exclusively engaged in the business of
labour/job work (other than a manufacturer), is not
eligible for ITC on purchase of consumables or capital
goods, merely because he is liable to pay tax on sale of any
waste/ scrap goods generated during the process of labour
job.
To illustrate, a job worker is exclusively engaged in the
business of labour job of cutting iron sheets (supplied by
the customer) into circles. He sells scrap, generated in this
process, and pays VAT due to the Govt. Even than he is not
eligible for tax credit on purchase of any consumable or
capital goods used for carrying his labour job.
46
Input Tax Credit-Contractors
• Works contractors can claim ITC on following purchases: Raw Material
 Consumables which do not get destroyed
 Packing Material
 Capital Goods other than those specified in Sch.VII
• Contractors are deemed either as trader or as manufacturer
• VAT paid on hire charges and consumable which get destroyed
can not be claimed as ITC since these are allowable deductions
as labour and services and are exempted sales.
• ITC on temporary shed/yard/office?
• Relations between contractor & sub-contractor – (a) If property is tfd. directly on principle of accretion – (b) Otherwise
47
Input Tax Credit-Service Sector
SERVICE SECTOR ALSO ENGAGED IN SALE LIKE
HOTELS
• Input tax is available on those purchases (including
rent) which are relatable for making sale by the dealer.
• Where goods (including capital goods) are used partly
for making sale and partly for providing service, ITC
will be available proportionately, e.g., common
generator used in the restaurant as well as rooms.
• Capital goods used exclusively for providing services
is not available for ITC, e.g., equipments used in Jim,
Swimming Pools etc.
48
Input Tax Credit-Right to Use
LESSER (Transfer Of Right To Use Goods)
• As per Determination by Commissioner u/s 84 in
Digitech - Benefit of Input tax credit is not available
to leasing company on its purchases even if its sales
are taxable in Delhi VAT
• Matter is pending before DVAT Tribunal
• If that is so purchase from other States against Form
C, paying 2% CST
49
Input Tax Credit-Right to Use
LESSER (Transfer Of Right To Use Goods)
• Right to use goods, i.e., leasing is covered under the
DVAT/CST and is covered in the definition of sale;
• Whenever, goods are purchased by the hirer for the
purpose of leasing, the local tax paid on purchases
should be eligible for ITC against output tax payable
on lease rent;
• Goods which are purchased and hired by the hirer
shall be treated as stock in trade and not non-capital
goods.
50
Input Tax Credit-Right to Use
LESSEE (Transfer Of Right To Use Goods)
• The lessee can also claim the benefit of input tax credit
if the goods are delivered at Delhi and used by him for
the purpose of use in trade, manufacture or execution
of works contract in Delhi
• The lessee will claim in installments on the basis of
periodical tax invoices raised by the lesser – Refer
Section 105(2)(b).
51
Input Tax Credit - Records
 The purchaser can claim ITC if he has in his
possession a valid tax invoice. ITC is not available
unless the words “Tax Invoice” are stated on the
invoice.
 Tax Invoice must contain:(a)
The words “tax invoice” in a prominent place;
(b)
N ame, address and registration number of the
selling registered dealer;
(c)
N ame and address of the purchaser and his
registration no., if already registered;
(d)
An individual pre-printed serialized number and the
date on which tax invoice is issued;
52
Input Tax Credit - Records
(e)
Description, quantity, volume and value of
goods sold and services provided and the
amount of tax charged thereon indicated
separately;
(f)
Signature of the selling dealer or his servant,
manager or agent, duly authorized by him; and
(g)
N ame and address of the printer and first and
last serial number of tax invoices printed and
supplied by him to the dealer.
53
Input Tax Credit - Records
Explanation to section 50(1) of the DV AT Act –
A registered dealer shall be authorized to issue tax
invoice only after certificate of registration is
issued by the Commissioner.
V ide clarification no. V AT/ Policy III/ 2005 06/ 898 dated 13th July 2005, it has been
clarified that the dealer who has been informed
his TIN can issues tax invoice from the date of
communication of TIN .
54
Input Tax Credit - Records
Duplicate Tax Invoice: Where a purchasing dealer
claims to have lost the original tax invoice, the
selling dealer may, upon a request made by the
purchasing dealer accompanied by an undertaking
cum indemnity in Form DV AT-36, provide a copy
of such last tax invoice clearly marked as a
“duplicate” and SHALL furnish a copy of such
undertaking cum indemnity along with his return
for the tax period in which such “duplicate” tax
invoice has been issued.
55
Input Tax Credit - Records
DEBIT AND CREDIT NOTE
Where a tax invoice has been issued in respect of a sale and –
(a)
The amount shown as tax in that tax invoice exceeds the
tax payable in respect of the sale, the dealer shall provide
the purchaser with a credit note, containing such
particulars as may be prescribed; or
(b)
The tax payable in respect of the sale exceeds the amount
shown as tax on the tax invoice, the dealer shall provide
the purchaser with a debit note, containing such particulars
as may be prescribed.
56
Input Tax Credit - Records
DEBIT AN D CREDIT N O TE
TO be signed by the person authorized to sign the return and
contain the following details:(a)
N ame, address and registration certificate number of
selling registered dealer;
(b)
N ame and address of the purchaser and his registration
number where the purchaser is a registered dealer;
(c)
Description of the reason for issuing the credit note or
debit note, as the case may be;
(d)
Serial number of the relevant tax invoice affected by the
credit note or debit note, as the case may be; and
(e)
Amount of the variation to the tax amount shown on the
tax invoice.
57
Input Tax Credit - Records
A
monthly
account
specifying
- Total output tax,
- Total input tax, and
- Net tax payable or the excess
tax credit due for carry forward.
Input
Tax Details of input tax calculations
Calculations
where the taxable person is
making both taxable and tax free
sales.
58
Input Tax Credit
TO CONCLUDE
• Input Tax Credit can be claimed by the dealers for their
eligible purchases of creditable goods (other than those listed
in Sch. VII) for the specified purposes made from local
registered dealers on the basis of a valid tax invoice.
• No one to one correlation of purchase and sale is required.
• Unclaimed amount of ITC at the end of the tax period can
be carried forward indefinitely or claimed as refund.
• To hold a valid Tax invoice at the time of filing of return for
claiming ITC is a mandatory requirement.
• Input Tax Credit is the essence of VAT Regime and legitimate
claim thereof is a true saving.
59
Presented By
60
CA Swatantra Singh, B.Com , FCA, MBA
Email ID: [email protected]
New Delhi , 9811322785,
www.caindelhiindia.com,
www.carajput.com
61

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