{"id":3986,"date":"2021-09-25T10:45:39","date_gmt":"2021-09-25T10:45:39","guid":{"rendered":"https:\/\/www.caindelhiindia.com\/blog\/?p=3986"},"modified":"2026-01-18T14:16:30","modified_gmt":"2026-01-18T14:16:30","slug":"re-availment-of-input-tax-credit-reversed","status":"publish","type":"post","link":"https:\/\/www.caindelhiindia.com\/blog\/re-availment-of-input-tax-credit-reversed\/","title":{"rendered":"Re-Availment Of Input Tax Credit Reversed"},"content":{"rendered":"<h2><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-3991\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/09\/Re-Availment-of-credit-reversed.jpg\" alt=\"Re-Availment Of Input Tax Credit Reversed\" width=\"1126\" height=\"563\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/09\/Re-Availment-of-credit-reversed.jpg 600w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/09\/Re-Availment-of-credit-reversed-300x150.jpg 300w\" sizes=\"(max-width: 1126px) 100vw, 1126px\" \/><\/h2>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69dc6ee32082c\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69dc6ee32082c\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.caindelhiindia.com\/blog\/re-availment-of-input-tax-credit-reversed\/#Re-Availment_Of_Input_Tax_Credit_Reversed\" title=\"Re-Availment Of Input Tax Credit Reversed\">Re-Availment Of Input Tax Credit Reversed<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.caindelhiindia.com\/blog\/re-availment-of-input-tax-credit-reversed\/#BRIEF_INTRODUCTION\" title=\"BRIEF INTRODUCTION\">BRIEF INTRODUCTION<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.caindelhiindia.com\/blog\/re-availment-of-input-tax-credit-reversed\/#ISSUES\" title=\"ISSUES\">ISSUES<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.caindelhiindia.com\/blog\/re-availment-of-input-tax-credit-reversed\/#Reversal_of_Input_tax_Credit\" title=\"Reversal of Input tax Credit\u00a0\">Reversal of Input tax Credit\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.caindelhiindia.com\/blog\/re-availment-of-input-tax-credit-reversed\/#INTEREST_UNDER_SECTION_50\" title=\"INTEREST UNDER SECTION 50\">INTEREST UNDER SECTION 50<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.caindelhiindia.com\/blog\/re-availment-of-input-tax-credit-reversed\/#RE-AVAILMENT_OF_INPUT_TAX_CREDIT\" title=\"RE-AVAILMENT OF INPUT TAX CREDIT \">RE-AVAILMENT OF INPUT TAX CREDIT <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.caindelhiindia.com\/blog\/re-availment-of-input-tax-credit-reversed\/#LIMITATION_PERIOD_FOR_RE-AVAILMENT\" title=\"LIMITATION PERIOD FOR RE-AVAILMENT \">LIMITATION PERIOD FOR RE-AVAILMENT <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.caindelhiindia.com\/blog\/re-availment-of-input-tax-credit-reversed\/#MOTOR_VEHICLES_BLOCKED_CREDIT\" title=\"MOTOR VEHICLES BLOCKED CREDIT\">MOTOR VEHICLES BLOCKED CREDIT<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.caindelhiindia.com\/blog\/re-availment-of-input-tax-credit-reversed\/#Goods_returned_goods_price_revision_under_which_act_concerned_document_will_be_issued\" title=\"Goods returned \/ goods price revision under which act concerned document will be issued. \n\">Goods returned \/ goods price revision under which act concerned document will be issued. \n<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.caindelhiindia.com\/blog\/re-availment-of-input-tax-credit-reversed\/#Delivery_Challan_on_return_of_Goods_sent_for_repair_testing\" title=\"Delivery Challan on return of Goods sent for repair &amp; testing: \">Delivery Challan on return of Goods sent for repair &amp; testing: <\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.caindelhiindia.com\/blog\/re-availment-of-input-tax-credit-reversed\/#GST_law_provision_related_Goods_returned_goods_price_revision\" title=\"GST law provision related Goods returned \/ goods price revision\">GST law provision related Goods returned \/ goods price revision<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.caindelhiindia.com\/blog\/re-availment-of-input-tax-credit-reversed\/#Goods_Returned_after_Appointed_Date\" title=\"Goods Returned after Appointed Date :\">Goods Returned after Appointed Date :<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.caindelhiindia.com\/blog\/re-availment-of-input-tax-credit-reversed\/#Goods_Returned_by_Unregistered_Person\" title=\"Goods Returned by Unregistered Person : \">Goods Returned by Unregistered Person : <\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.caindelhiindia.com\/blog\/re-availment-of-input-tax-credit-reversed\/#Goods_Returned_by_Unregistered_Person_Upward_price_revision\" title=\"Goods Returned by Unregistered Person &amp; Upward price revision: \">Goods Returned by Unregistered Person &amp; Upward price revision: <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.caindelhiindia.com\/blog\/re-availment-of-input-tax-credit-reversed\/#Goods_Returned_by_Unregistered_Person_Downward_price_revision\" title=\"Goods Returned by Unregistered Person &amp; Downward price revision: \">Goods Returned by Unregistered Person &amp; Downward price revision: <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/www.caindelhiindia.com\/blog\/re-availment-of-input-tax-credit-reversed\/#Goods_Sent_on_Approval_Basis_under_section_14212\" title=\"Goods Sent on Approval Basis under section 142(12) : \">Goods Sent on Approval Basis under section 142(12) : <\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Re-Availment_Of_Input_Tax_Credit_Reversed\"><\/span><span style=\"color: #ff0000;\">Re-Availment Of Input Tax Credit Reversed<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"BRIEF_INTRODUCTION\"><\/span><span style=\"color: #000080;\"><strong>BRIEF INTRODUCTION<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>As per the section 16 of CGST Act, 2017, the eligibility and conditions in respect of availment of input\u00a0tax credit has been provided. Thus, every person, registered under GST, would be entitled\u00a0to claim\u00a0credit in respect of input tax, being paid by them on supply\u00a0of products\u00a0or services or both, being exclusively used in the course or furtherance of their business.<\/p>\n<p>Also, section 17 of CGST Act, 2017, provides for the apportionment of credit and blocked credit.<\/p>\n<p style=\"padding-left: 40px;\">As per the clauses (g) and (h) of sub-section 50 of section 17 envisages\u00a0the subsequent\u00a0goods or services, namely;<\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>(g) Goods or services or both, being specifically used for private\u00a0consumption.<\/li>\n<li>(h) Goods lost, stolen, destroyed, written off or disposed of in the form of gift or free samples.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>These situations are of such nature that the ITC in respect of these goods become ineligible after the availment of credit under section 16. For e.g., a trader of electricity appliances purchases air-conditioners purchasable and avails of the input tax credit of the same. However, after some time, the trader puts one of the air-conditioner for his personal use.<\/p>\n<p>There may additionally be cases where the input tax credit is availed of on goods purchased to be used in manufacture but the same is found ineligible at a later point of your time because of unforeseen future events like goods being lost or stolen before use in manufacture.<\/p>\n<p>Now, in such cases, the registered person, having availed the ITC, would be required to reverse the amount of ITC in respect of such goods as per the provisions of section 17 (5).<\/p>\n<h3><span class=\"ez-toc-section\" id=\"ISSUES\"><\/span><span style=\"color: #ff0000;\"><strong>ISSUES<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>In this regard\u00a0the subsequent\u00a0issue arises namely;<\/p>\n<ul>\n<li>Manner of reversal as per the provisions of section 17(5)<\/li>\n<li>Interest Application as per the provisions of section 50 and<\/li>\n<li>Re-availment of credit reversed as per the provisions of section 17(5), provided the events causing reversal of credit gets nullified.<\/li>\n<\/ul>\n<p>The present write-up seeks\u00a0to look at\u00a0the above issued in its proper perspective.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Reversal_of_Input_tax_Credit\"><\/span><a href=\"https:\/\/carajput.com\/blog\/re-availment-of-input-tax-credit-reversed\/\"><span style=\"color: #000080;\"><strong>Reversal of Input tax Credit\u00a0<\/strong><\/span><\/a><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone  wp-image-9961\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/09\/itc-reversal.jpeg\" alt=\"Reversal of Input tax Credit\u00a0\" width=\"1120\" height=\"1680\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/09\/itc-reversal.jpeg 1024w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/09\/itc-reversal-200x300.jpeg 200w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/09\/itc-reversal-683x1024.jpeg 683w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/09\/itc-reversal-768x1152.jpeg 768w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/09\/itc-reversal-800x1200.jpeg 800w\" sizes=\"(max-width: 1120px) 100vw, 1120px\" \/><\/p>\n<p>Under the GST law,\u00a0a selected\u00a0procedure is prescribed for\u00a0the style\u00a0of reversal of credit on account on non-payment of consideration to\u00a0the seller\u00a0within 180 days as per the 2<sup>nd<\/sup> proviso of section 16(2), or use of supply in providing exempt supplies. However, it is seen, that no specified mechanism has been provided in respect of the way reversal of credit be undertaken.<\/p>\n<p>Now, in the absence of a specific mechanism, it would be beneficial, that the registered person shall debit the restricted credit\u00a0within the\u00a0table of ineligible ITC, under the GSTR-3B.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"INTEREST_UNDER_SECTION_50\"><\/span><span style=\"color: #000080;\"><strong>INTEREST UNDER SECTION 50<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>According to section 73(1), it has been provided that, in case the proper\u00a0officer believes that certain amount of tax stands unpaid or falls short or has been erroneously refunded, the same requires an explanation\u00a0of fraud or any wilful-misstatement and the officer may ask the registered person make the payment of tax being short-paid or not paid. Sub-section (1) of section 50 provides for payment of interest where\u00a0somebody\u00a0who is\u00a0susceptible to\u00a0pay tax fails to pay the tax or any part thereof within the prescribed period.<\/li>\n<li>As per section 50(3), provisions have been provided in respect of charge of interest in respect of under or excess claim of ITC, arising due to mismatch of credit or excess reduction claimed.<\/li>\n<li>A careful reading of section 50 suggests that no interest liability is provided where the wrongful availment of credit\u00a0doesn&#8217;t\u00a0cause\u00a0a situation where\u00a0there&#8217;s\u00a0short-payment of tax,\u00a0because of\u00a0accumulation of eligible credit.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"RE-AVAILMENT_OF_INPUT_TAX_CREDIT\"><\/span><a href=\"https:\/\/www.caindelhiindia.com\/blog\/gst-department-notice-how-to-deal-with-gst-asmt-10\/\"><span style=\"color: #000080;\"><strong>RE-AVAILMENT OF INPUT TAX CREDIT <\/strong><\/span><\/a><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>As per the GST law, re-availment of ITC already reversed by the registered person has been provided for and the same is envisaged by the section 16(2)(3) of GST Act. For availaing such credit, the recipient\u00a0must have made payment in respect of supply\u00a0of products\u00a0or services or both\u00a0along with the amount of GST thereon.<\/li>\n<li>Thus, where\u00a0the products\u00a0have been lost or stolen, are subsequently traced and the same is included in the inventory, then the said taxpayers would be eligible for re-availment of ITC.<\/li>\n<li>Hence, where an assessee is ready to ascertain that the event resulting in the reversal of input tax credit under section 17(5) has been nullified, it is concluded that he would be entitled to re-avail the credit so reversed.<\/li>\n<li>However, it&#8217;s advisable to keep up an entire record so on establish the fact of credit eligibility. it&#8217;s also prudent to tell the Department about the fact of re-availment of the credit so on avoid litigation within the future.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"LIMITATION_PERIOD_FOR_RE-AVAILMENT\"><\/span><span style=\"color: #000080;\"><strong>LIMITATION PERIOD FOR RE-AVAILMENT <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Sub-section (4) of section 16 envisages the\u00a0deadline\u00a0for taking of input\u00a0tax credit\u00a0in respect of any invoice or debit, not for\u00a0the availability\u00a0of products\u00a0or services or both. Accordingly, the ITC shall not be available in respect of invoice or debit note, that are dated after the date of furnishing of the return in relation to the month of September of the subsequent year or furnishing of the relevant annual return whichever is earlier.<\/p>\n<p>As per sub-rule (4) of rule 37 of the CGST Rules, the\u00a0closing date\u00a0per\u00a0subsection 94, of section16 shall not apply\u00a0to assert\u00a0for re-availing of any credit, that has been reversed earlier. It may be noted that rule 37 prescribes\u00a0the way\u00a0of reversal of input\u00a0tax credit\u00a0within the\u00a0case of non-payment of consideration. However, the Rule 37(4) provides for the re-availment of ITC.<\/p>\n<p>Thus, it is advisable, that the registered person should always be in receipt of proper track and documentation of event resulting in reversal of ITC.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"MOTOR_VEHICLES_BLOCKED_CREDIT\"><\/span><span style=\"color: #000080;\"><strong>MOTOR VEHICLES BLOCKED CREDIT<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<table style=\"height: 346px;\" width=\"1095\">\n<tbody>\n<tr>\n<td width=\"26\"><\/td>\n<td width=\"379\">CATEGORY<\/td>\n<td colspan=\"2\" width=\"227\">MOTOR VEHICLE WITH SEATING CAPACITY OF 14 OR MORE<\/td>\n<td colspan=\"2\" width=\"326\">MOTOR VEHICLE WITH SEATING CAPACITY OF 13 OR LESS<\/td>\n<\/tr>\n<tr>\n<td colspan=\"3\" width=\"431\"><\/td>\n<td width=\"201\"><\/td>\n<td width=\"188\">FOR RESALE-TRANSPORT BY TRANSPORT OPERATOR, DRIVING SCHOOL<\/td>\n<td width=\"138\">\u00a0OTHER USE<\/td>\n<\/tr>\n<tr>\n<td colspan=\"3\" width=\"431\">CREDIT ON MOTOR VEHICLE<\/td>\n<td width=\"201\">AVAILABLE<\/td>\n<td width=\"188\">AVAILABLE<\/td>\n<td width=\"138\">NOT AVAILABLE<\/td>\n<\/tr>\n<tr>\n<td colspan=\"3\" width=\"431\">CREDIT ON REPAIR, INSURANCE, SERVICING ETC<\/td>\n<td width=\"201\">AVAILABLE<\/td>\n<td width=\"188\">AVAILABLE<\/td>\n<td width=\"138\">NOT AVAILABLE<\/td>\n<\/tr>\n<tr>\n<td colspan=\"3\" width=\"431\">CREDIT ON RENTING, LEASING OR HIRING<\/td>\n<td width=\"201\">AVAILABLE<\/td>\n<td width=\"188\">AVAILABLE<\/td>\n<td width=\"138\"><em>\u00a0<\/em>NOT AVAILABLE<\/td>\n<\/tr>\n<tr>\n<td width=\"26\"><\/td>\n<td width=\"379\"><\/td>\n<td width=\"26\"><\/td>\n<td width=\"201\"><\/td>\n<td width=\"188\"><\/td>\n<td width=\"138\"><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><strong>Similar provisions apples to Aircraft and Vessel. However, Aircraft and Vessel being specifically utilized for the purpose of transport of goods shall be eligible for <\/strong><strong>input tax credit <\/strong><strong>availement.<\/strong><\/p>\n<ul>\n<li>It is to be noted, that there are certain cases, where the credits are blocked, provided they are supplied in making a further outward supply as a composite or mixed supply-<\/li>\n<\/ul>\n<table width=\"925\">\n<tbody>\n<tr>\n<td width=\"138\">FOOD &amp; BEVERAGES<\/td>\n<td width=\"38\">+<\/td>\n<td width=\"118\">OUTDOOR CATERING<\/td>\n<td width=\"55\">+<\/td>\n<td width=\"139\">BEAUTY TREATMENT<\/td>\n<td width=\"46\">+<\/td>\n<td width=\"144\">HEALTH SERVICES<\/td>\n<td width=\"70\">+<\/td>\n<td width=\"176\">COSMETIC &amp;PLASTIC SURGERY<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>\u2013<\/p>\n<table width=\"936\">\n<tbody>\n<tr>\n<td width=\"90\">RENT A CAB<\/td>\n<td width=\"53\">+<\/td>\n<td width=\"133\">LIFE\/HEALTH INSURANCE<\/td>\n<td width=\"58\">+<\/td>\n<td width=\"142\">MEMBERSHIP OF CLUB<\/td>\n<td width=\"61\">+<\/td>\n<td width=\"111\">HEALTH &amp; FITNESS CENTRE<\/td>\n<td width=\"95\">+<\/td>\n<td width=\"193\">TRAVEL BENEFIT TO EMPLOYEES<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<ul>\n<li>As per amended section 17(5), input\u00a0tax credit\u00a0of all above services shall be eligible if\u00a0it&#8217;s\u00a0obligatory on a part of\u00a0employer\u00a0to supply\u00a0the same\u00a0to its employees under any law for the\u00a0present\u00a0in effect. For E.g., Credit of GST paid on outdoor catering services\u00a0utilized in\u00a0factory\u00a0could also be\u00a0allowed after effective date, as Factories Act made it compulsory\u00a0to supply\u00a0canteen services if factory has certain no of employees. Earlier, this credit\u00a0wasn&#8217;t\u00a0allowed.<\/li>\n<li>Even though, the credit is blocked on above supplies, the registered person would be eligible to claim the ITC, provided the same is utilized for effecting further taxable supply of same\u00a0category; or as taxable composite or mixed supply.<\/li>\n<li>Construction of Immovable Property (excluding PPE)- Work contract services, excluding the service where the same acts as an input for further supply, being received by taxable person for construction of an immovable property on his own account even when\u00a0utilized in\u00a0course or furtherance of business, the ITC would not be available.<\/li>\n<li>The word Construction consists of re-construction, renovation, additions or alterations or repairs, provided the same is capitalized. So, what does it mean??? It means if not capitalised\u00a0you&#8217;ll be able to\u00a0claim ITC, yes,\u00a0you&#8217;ll\u00a0claim but\u00a0keep in\u00a0mind\u00a0you have got\u00a0to differentiate\u00a0between\u00a0capital\u00a0and revenue expenditure.<\/li>\n<li>Self-construction- Inward supply\u00a0of products\u00a0or services for construction of an immovable property for \u2018own use\u2019 would also not be eligible for input\u00a0tax credit. This restriction applies even when such immovable property\u00a0is employed\u00a0within the\u00a0course or in furtherance of business. Understanding the scope of \u2018immovable property\u2019\u00a0is extremely\u00a0important.<\/li>\n<li>Immovable property is well understood to be land and building but it also includes everything\u00a0that&#8217;s\u00a0attached to or forming\u00a0a part of\u00a0the land and rights-in-land. ITC would be blocked, where all the inward supplies\u00a0are utilized for the establishment of any immovable property.<\/li>\n<li>Also, the inward supply of services, being received from a property\u00a0agent, architect, interior decorators and contractors, all comes into the category of blocked credit, since the same are involved\u00a0within the\u00a0establishment of the immovable asset.\n<ul>\n<li>But, if inward supplies\u00a0like\u00a0security, house-keeping and property maintenance are used after construction, then such credits\u00a0don&#8217;t seem to be\u00a0blocked as these are received after establishment of the immovable property.<\/li>\n<\/ul>\n<\/li>\n<li>Goods or services or both on which tax has been paid under Section 10- Section 10(4) provides the conditions to be fulfilled for\u00a0an individual\u00a0falling under composition scheme, with respect of input\u00a0tax credit.\u00a0one in all\u00a0the conditions state that\u00a0an individual\u00a0choosing\u00a0the composition scheme\u00a0mustn&#8217;t\u00a0collect any taxes from the recipient. As no taxes are paid by the recipient, no input\u00a0tax credit\u00a0will be\u00a0availed by them either.<\/li>\n<li>Goods or services or both received by a non-resident taxable person except on goods imported by him- A non-resident taxable person (NRTP)\u00a0could be a\u00a0one that\u00a0temporarily supplies any goods or services within India\u00a0while\u00a0they&#8217;re\u00a0not a resident of the taxable territory.<\/li>\n<li>In respect of\u00a0the products\u00a0or services received within India, no input\u00a0tax credit\u00a0will be\u00a0availed by them. However,\u00a0they&#8217;re\u00a0liberal to\u00a0avail the input\u00a0tax credit\u00a0of\u00a0the products\u00a0imported by them from outside India.<\/li>\n<li>Personal consumption- Now\u00a0what&#8217;s\u00a0personal consumption?? There must be some sought of chain creation between ITC availed and the outward supply made. This clause provides a check\u00a0to work out\u00a0if the \u2018immediate and ultimate\u2019 use or consumption any item is personal benefit to the person or not,\n<ul>\n<li>then in such a case, the Input Tax Credit shall not be available however, where the ultimate benefit is rendered to the company, then the Input Tax Credit credit would be available.<\/li>\n<\/ul>\n<\/li>\n<li>Goods lost, stolen, destroyed, written off or disposed of in the form of gift or free samples- as per the section 16 (1), it has been provided that the ITC\u00a0will be\u00a0claimed, provided the same is utilized in\u00a0course or furtherance of business. Thus, Simple No use No ITC.<\/li>\n<li>Lost goods refer to goods that are missing and cannot be traced.<\/li>\n<li>Stolen goods refer to goods that are found to be lower, determined upon the physical verification of stock.<\/li>\n<li>Destroyed \u2013 Any goods which get destructed\u00a0because of\u00a0any natural calamity like flood, earthquake or a man-made event like fire, water leakage etc<\/li>\n<li>Written off \u2013 If any goods are having\u00a0a particular\u00a0value as per the books of accounts but are completely written off\u00a0thanks to\u00a0any reason\u00a0like\u00a0obsolescence or lapse\u00a0of your time<\/li>\n<li>Disposed of by way of gift or free samples- Disposed of means\u00a0to urge\u00a0rid of-unfit for sale- by way of gift or free sample\u2013 Gift means if\u00a0it&#8217;s\u00a0irrevocable and free samples indicates delivery\u00a0of products\u00a0to be used\u00a0or consumption on non-contractual basis.<\/li>\n<li>Some examples-\u00a0prescription medicine\u00a0samples marked \u2018Physician\u2019s sample\u00a0shall not\u00a0be sold\u2019<\/li>\n<li>Any amount of tax paid as per the provisions of Sections 74, 129 and 130-<\/li>\n<li>Section 74 provides for the payment of taxes\u00a0during a\u00a0situation where taxes\u00a0isn&#8217;t\u00a0paid or short paid or erroneously refunded or input\u00a0tax credit\u00a0wrongly availed.<\/li>\n<li>Section 129 provides for the detention, seizure and release\u00a0of products\u00a0and conveyance in transit.<\/li>\n<\/ul>\n<p>Further, Section 130 mentions about confiscation of products and\/or conveyance and levy of penalty. In above cases if any payment is formed by anyone under these sections, no input tax credit in respect of those would be available.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Goods_returned_goods_price_revision_under_which_act_concerned_document_will_be_issued\"><\/span><strong><span style=\"color: #000080;\">Goods returned \/ goods price revision under which act concerned document will be issued.<\/span><br \/>\n<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"Delivery_Challan_on_return_of_Goods_sent_for_repair_testing\"><\/span><strong><span style=\"color: #000080;\">Delivery Challan on return of Goods sent for repair &amp; testing:<\/span> <\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>When goods are originally sent for repair\/testing: As per Section 31(1) &amp; Rule 55 \u2013 CGST Rules &amp; GST Circular No. 142\/12\/2020-GST applies. When goods are sent without supply, Consignor (original owner of goods) issues Delivery Challan. Under GST, the requirement to issue a fresh Delivery Challan on return of goods sent for repair and testing depends on who is sending the goods back.<\/li>\n<li>Delivery Challan position in case of return of goods after repair\/testing: Yes, a fresh Delivery Challan is required. In this case basic Question arises that Who will issue the Delivery Challan: Movement of goods again takes place, as per GST Rule 55 of CGST Rules mandates a Delivery Challan for every movement otherwise than by way of supply. Repairer is the sender at the time of return, hence responsible for Delivery Challan. So Consignee (the repairer\/service provider) will issue the Delivery Challan for returning the goods to the owner.<\/li>\n<li>It is to be noted that Fresh Delivery Challan is mandatory at the time of return. Original Delivery Challan reference should be mentioned in return Delivery Challan. E-Way Bill is required if Consignment value exceeds prescribed limit &amp; distance threshold is crossed. Moreover, that for the repair charges, Tax Invoice to be issued separately by repairer for service portion &amp; GST applicable on repair charges<\/li>\n<li><strong style=\"color: #000080;\">In summary about Goods sent for repair &amp; testing:<\/strong><\/li>\n<\/ul>\n<table style=\"height: 315px;\" width=\"1042\">\n<thead>\n<tr>\n<td>Stage<\/td>\n<td>Nature of Movement<\/td>\n<td>Who issues DC<\/td>\n<td>Document<\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Goods sent for repair<\/td>\n<td>Not a supply<\/td>\n<td>Owner\/Consignor<\/td>\n<td>Delivery Challan<\/td>\n<\/tr>\n<tr>\n<td>Goods returned after repair<\/td>\n<td>Not a supply<\/td>\n<td>Repairer\/Consignee<\/td>\n<td>Fresh Delivery Challan<\/td>\n<\/tr>\n<tr>\n<td>Repair charges<\/td>\n<td>Supply of service<\/td>\n<td>Repairer<\/td>\n<td>Tax Invoice<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2><span class=\"ez-toc-section\" id=\"GST_law_provision_related_Goods_returned_goods_price_revision\"><\/span><span style=\"color: #000080;\"><strong>GST law provision related Goods returned \/ goods price revision<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Section 142 of the Central Goods And Services Tax Act, 2017\u00a0 was enacted precisely to avoid confusion during the transition from Old Laws to GST. Below is a clean, exam-ready and practice-ready explanation of which Act governs the document (Old Act or GST) in cases of goods return and price revision after the appointed date (01-07-2017).\u00a0 Core Principle or Thumb Rule related to indirect tax is GST\/ VAT Tax follows the law applicable to the event that triggers tax liability, as specifically overridden by Section 142.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Goods_Returned_after_Appointed_Date\"><\/span><span style=\"color: #000080;\"><strong>Goods Returned after Appointed Date :<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Section 142(1) of the Central Goods And Services Tax Act, 2017: Situation:<\/p>\n<ul>\n<li>Goods sold before 01-07-2017<\/li>\n<li>VAT \/ Excise already paid<\/li>\n<li>Goods returned on or after 01-07-2017<\/li>\n<\/ul>\n<p><span style=\"color: #000080;\"><strong>Two separate treatments:<\/strong><\/span><\/p>\n<p><span style=\"color: #000080;\"><strong>Case A: Goods returned by Registered Person :<\/strong> <\/span>as per Proviso to Section 142(1) of the Central Goods And Services Tax Act, 2017 stated that Goods Return is deemed supply under GST<\/p>\n<table style=\"height: 317px;\" width=\"716\">\n<thead>\n<tr>\n<td>Particular<\/td>\n<td>Treatment<\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Governing law<\/td>\n<td>GST Act<\/td>\n<\/tr>\n<tr>\n<td>Document<\/td>\n<td>GST Tax Invoice<\/td>\n<\/tr>\n<tr>\n<td>Tax<\/td>\n<td>GST payable<\/td>\n<\/tr>\n<tr>\n<td>ITC<\/td>\n<td>Available to recipient<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span style=\"color: #000080;\"><strong>Case B: Goods returned by Unregistered Person then No GST supply &amp; <\/strong><\/span>Refund allowed under Old Law that Conditions applicable for that Goods returned within 6 months from appointed date &amp; Goods identifiable to satisfaction of officer<\/p>\n<table style=\"height: 322px;\" width=\"723\">\n<thead>\n<tr>\n<td>Particular<\/td>\n<td>Treatment<\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Governing law<\/td>\n<td>Old VAT \/ Excise Act<\/td>\n<\/tr>\n<tr>\n<td>Document<\/td>\n<td>VAT Credit Note<\/td>\n<\/tr>\n<tr>\n<td>Tax<\/td>\n<td>No GST<\/td>\n<\/tr>\n<tr>\n<td>Refund<\/td>\n<td>VAT refundable to seller (benefit passed to buyer)<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span style=\"color: #000080;\"><strong>Price Revision after Appointed Date : Section 142(2) <\/strong><\/span><\/p>\n<ul>\n<li>Contract entered before 01-07-2017<\/li>\n<li>Price revised after 01-07-2017<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Goods_Returned_by_Unregistered_Person\"><\/span><span style=\"color: #000080;\"><strong>Goods Returned by Unregistered Person : <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Two small practical remarks:<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Goods_Returned_by_Unregistered_Person_Upward_price_revision\"><\/span><span style=\"color: #000080;\"><strong>Goods Returned by Unregistered Person &amp; Upward price revision: <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Goods Refund under old law is handled as per Section 142(3) (read with respective VAT\/excise provisions). And Price Revision provision u\/s 142(2) the Central Goods And Services Tax Act, 2017. \u00a0This is one of the most misunderstood provisions, and your explanation is crystal clear. Supplementary invoice\/debit note must be issued within 30 days (Rule 53 read with 142(2)). When Price is Revised Upward then following Treatment will be follow by Taxpayer<\/p>\n<table style=\"height: 364px;\" width=\"1030\">\n<thead>\n<tr>\n<td>Particular<\/td>\n<td>Treatment<\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Document<\/td>\n<td>Supplementary Invoice \/ Debit Note<\/td>\n<\/tr>\n<tr>\n<td>Governing law<\/td>\n<td>GST Act<\/td>\n<\/tr>\n<tr>\n<td>Nature<\/td>\n<td>Deemed outward supply under GST<\/td>\n<\/tr>\n<tr>\n<td>Tax<\/td>\n<td>GST payable<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Even though original supply was pre-GST, revision attracts GST<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Goods_Returned_by_Unregistered_Person_Downward_price_revision\"><\/span><span style=\"color: #000080;\"><strong>Goods Returned by Unregistered Person &amp; Downward price revision: <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>When Price Revised Downward then following Treatment will be follow by Taxpayer. Reduction in tax liability is subject to Section 34(2) the Central Goods And Services Tax Act, 2017 conditions (credit note declaration and ITC reversal by recipient).<\/p>\n<table style=\"height: 260px;\" width=\"990\">\n<thead>\n<tr>\n<td>Particular<\/td>\n<td>Treatment<\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Document<\/td>\n<td>Credit Note<\/td>\n<\/tr>\n<tr>\n<td>Governing law<\/td>\n<td>GST Act<\/td>\n<\/tr>\n<tr>\n<td>Effect<\/td>\n<td>Reduction in GST liability<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Credit note deemed issued under GST, not under old law<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Goods_Sent_on_Approval_Basis_under_section_14212\"><\/span><span style=\"color: #000080;\"><strong>Goods Sent on Approval Basis under section 142(12) : <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The 6\u2011month period can be extended by another 2 months by the commissioner. Advance &amp; Invoicing for Services (142(11)) Accurately captured. A reinforcing point Where VAT portion of a works contract exists, VAT law continues to govern pre\u2011GST portion, while service component follows 142(11). As per Section 142(12) of the Central Goods And Services Tax Act, 2017. Goods sent before GST (\u2264 6 months prior) then Goods returned within 6 months from 01-07-2017. Then then following Treatment will be follow by Taxpayer<\/p>\n<table style=\"height: 250px;\" width=\"920\">\n<thead>\n<tr>\n<td><strong>Treatment<\/strong><\/td>\n<td><strong>Result<\/strong><\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td><strong>Tax<\/strong><\/td>\n<td><strong>No tax payable<\/strong><\/td>\n<\/tr>\n<tr>\n<td><strong>Law<\/strong><\/td>\n<td><strong>Neither VAT nor GST<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>As per Section 142(12) of the Central Goods And Services Tax Act, 2017: \u00a0When Goods is Returned after 6 months then GST tax will pay by Person returning goods as per GST Invoice as per GST law<\/p>\n<p>As per Section 142(12) of the Central Goods And Services Tax Act, 2017, if Goods are not returned at all \u00a0then Person who sent goods will pay the tax as per GST Law<\/p>\n<p>Services \u2013 Advance &amp; Invoicing (Section 142(11))<\/p>\n<table style=\"height: 256px;\" width=\"1017\">\n<thead>\n<tr>\n<td>Event<\/td>\n<td>Applicable Law<\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Advance received before 01-07-2017<\/td>\n<td>Service Tax Act<\/td>\n<\/tr>\n<tr>\n<td>Invoice issued after 01-07-2017 (to extent advance received)<\/td>\n<td>Service Tax<\/td>\n<\/tr>\n<tr>\n<td>Balance service after GST<\/td>\n<td>GST Act<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>\u2714 Credit of Service Tax allowed via TRAN provisions<\/p>\n<p><strong>In Summary <\/strong><\/p>\n<p>Section 142 overrides Sections 12 &amp; 13 and decisively determines whether Old Law or GST applies. Documents are issued strictly as per the law deemed applicable u\/s 142 not based on invoice date alone. Overall Validation of legally accurate and covers <em>all the transition edge cases<\/em> exactly as interpreted in departmental clarifications and common practice following section apply as per GST law :<\/p>\n<ul>\n<li>Section 142(1) \u2192 Goods return<\/li>\n<li>Under Section 142(2) \u2192 Price revision<\/li>\n<li>Section 142(12) \u2192 Goods sent on approval<\/li>\n<li>Under Section 142(11) \u2192 Advances and services<\/li>\n<\/ul>\n<p>Section 142 overrides Sections 12 &amp; 13 where transitional events are concerned.<br \/>\nTax follows the <em>trigger event<\/em> as per Section 142 not invoice date, not pre\u2011GST supply date.\u00a0 Goods Returned by Registered Person (142(1) proviso) that Goods Return is to be consider as deemed supply and then GST applies and ITC allowed. Moreover, that Additional precision law understanding to be made that \u201cDeemed supply\u201d is not because of Schedule I, it is a special deeming under the proviso to 142(1). And Time of supply is determined u\/s 12, since this is <em>now a fresh supply under GST<\/em>.\u00a0<strong>One-Page Summary Table<\/strong><\/p>\n<table style=\"height: 516px;\" width=\"1114\">\n<thead>\n<tr>\n<td><strong>Scenario<\/strong><\/td>\n<td><strong>Applicable Act<\/strong><\/td>\n<td><strong>Document<\/strong><\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Goods sold pre-GST, returned by registered person<\/td>\n<td>GST Act<\/td>\n<td>GST Invoice<\/td>\n<\/tr>\n<tr>\n<td>Goods sold pre-GST, returned by unregistered person<\/td>\n<td>Old VAT Act<\/td>\n<td>VAT Credit Note<\/td>\n<\/tr>\n<tr>\n<td>Price revision upward post-GST<\/td>\n<td>GST Act<\/td>\n<td>Debit Note<\/td>\n<\/tr>\n<tr>\n<td>Price revision downward post-GST<\/td>\n<td>GST Act<\/td>\n<td>Credit Note<\/td>\n<\/tr>\n<tr>\n<td>Approval goods returned within 6 months<\/td>\n<td>No tax<\/td>\n<td>DC only<\/td>\n<\/tr>\n<tr>\n<td>Approval goods returned after 6 months<\/td>\n<td>GST Act<\/td>\n<td>GST Invoice<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n","protected":false},"excerpt":{"rendered":"<p>Re-Availment Of Input Tax Credit Reversed BRIEF INTRODUCTION As per the section 16 of CGST Act, 2017, the eligibility and conditions in respect of availment of input\u00a0tax credit has been provided. Thus, every person, registered under GST, would be entitled\u00a0to claim\u00a0credit in respect of input tax, being paid by them on supply\u00a0of products\u00a0or services or &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[144],"tags":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/3986"}],"collection":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/comments?post=3986"}],"version-history":[{"count":5,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/3986\/revisions"}],"predecessor-version":[{"id":9959,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/3986\/revisions\/9959"}],"wp:attachment":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/media?parent=3986"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/categories?post=3986"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/tags?post=3986"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}