Page 249 - CA Final GST

Badlani Classes

Example 9: Hero Cycles Ltd purchased a tempo for transport of its employees within
factory premises. Hero Cycles Ltd can not avail ITC on tempo as it is not used in respect
of allowed activities.
Example 10: X Ltd takes the services of M/s Y Caterers for Diwali celebration event for
its employees. X ltd can not avail ITC on catering services.
Example 11: M/s X caterers takes the services of a shamiana while providing the catering
services to M/s Y Cycles. Here M/s X caterers can avail ITC on shamiana services, cause
they have been used for making outward supplies.
Example 12 :Mr X is registered as a composition tax payer under GST and purchases store
items from the manufacturer for Rs 20,000/- on which GST is charged @ 12% amounting
to Rs 2,400/-. Since Mr X is registered as a composition tax payer, it can not avail ITC of
Rs 2,400/- on the purchases. This GST paid will become part of their material cost.
Example 13: Mr Raj is a chair dealer. On 1/10/17 he purchased 20 chairs @ Rs 25,000
each & paid GST @ 18% i.e. Rs 90,000/- . On 5/10/2017 2 chairs gets destroyed, now Mr
Raj can not avail ITC of Rs 9,000/-
Example 14: M/s ABC Ltd buys goods worth Rs 1,00,000/- from Mr F (unregistered). M/s
ABC Ltd. pays GST of Rs 12,000/- on reverse charge basis. Now M/s ABC ltd shall be
eligible to get credit of Rs 12,000/- through its Electronic Credit Ledger.
Sec 18 Availability of credit in Special circumstances
1- ITC on opening stock of Inputs at the time of registration
Subject to such conditions and restrictions as may be prescribed-
a- a person who has applied for registration under this Act within thirty daysfrom the
date on which he becomes liable to registration and has been granted such
registration shall be entitled to take credit of input tax in respect of
- inputs held in stockand
- inputs contained in semi-finished or
- finished goods held in stock
on the day immediately preceding the date from which he becomes liable to pay
tax under the provisions of this Act;
Example: Mr X is a mfg. of goods and have crossed the threshold limit on 1/10/18. Mr X
have stock of Raw material of Rs 20 lacs on which he paid GST of Rs 2 lacs. Mr X got
registration by 30/10/18. Now in that case he will be eligible to avail ITC of Rs 2 lacs.
b- ITC on opening stock of inputs in case of voluntary registration
a person who takes registration under section 25(3) shall be entitled to take credit
of input tax in respect of
- inputs held in stock and
- inputs contained in semi-finished or
- finished goods held in stock
on the day immediately preceding the date of grant of registration
Example: Mr X apply for registration under GST voluntarily on 1/10/18 and have granted
registration on 10/10/18. On the date of 10/10/18 he has stock of Rs 20 lacs on which he
has already paid GST of Rs 2 lacs. Now, he will be eligible to get the ITC of Rs 2 lacs.
c- ITC on opening stock of inputs / Capital Goods if taxable person switching
from composition scheme:
where any registered person ceases to pay tax under section 10, he shall be entitled
to take credit of input tax in respect of Page248
- inputs held in stock,

Central Goods & Services Tax Act, 2017