Page 4 - Ch_10 ITC

01. General Questions on ITC:-

CCP 10.01.01.00
Answer the following independent questions:-
(i) What is input tax & Input Tax Credit? [Study Mat]
(ii) MN & Co, an unregistered supplier, wants to claim input tax credit and collect tax. Can it do so?
Answer:

(i) Ü Input tax means central tax (CGST), State tax (SGST), integrated tax (IGST) or Union territory tax
(UTGST) charged on inward supply of goods or services or both of a registered person.
Ü It includes tax paid on reverse charge basis and IGST charged on import of goods.
Ü It does not include tax paid under composition levy.

(ii) Ü No, LMN & Co. cannot claim input tax credit and collect tax.
Ü Only a registered person can collect tax from his customers & also claim input tax credit u/s 16(1) of
CGST Act, 2017.
ÜHowever, if LMN & Co. nevertheless wants to claim input tax credit and collect tax, it can apply for
voluntary registration u/s 25(3) of CGST Act.

02. Section 16(2):- Conditions to avail ITC

CCP 10.02.02.00
What are the conditions necessary for availing ITC? [CA IPC MTP 2018] [Study Mat]
Answer:-
As per section 16(2) of CGST Act, 2017, all the following conditions are to be satisfied by the registered
taxable person for obtaining ITC:-

a) He is in possession of tax invoice or debit note or such other prescribed tax paying documents.
b) Supplier has furnished the details of invoice or debit note in his GSTR-1 & also communicated the same to
the registered person in GSTR-2B.
c) He has received the goods or services or both,

d) The details of ITC in respect of the said supply communicated to such registered person under section 38
has not been restricted.
e) Subject to section 41, supplier has actually paid the tax charged on the supply to Government and
f) He has furnished the return under section 39.

Sec 16(2)(aa) read with Rule 36(4):- Supplier to furnish
details of Invoice/Debit Note & Communicate the same
CCP 10.02.03.00

Laxmi Traders, a supplier of electric goods, is registered under GST in the state of Karnataka. Laxmi
Traders receives 200 invoices for inward supply of goods and services, involving GST of ₹8,00,000,
from various suppliers during the month of November, 20XX.
Compute the input tax credit (ITC) that can be claimed by Laxmi Traders in his GSTR-3B for the
month of November, 20XX to be filed by 20th December, 20XX in the following independent situations

assuming that GST of ₹8,00,000 is otherwise eligible for input tax credit:-
Situation 1st: Out of 200 invoices, 160 invoices involving GST of ₹7,00,000 have been uploaded by the
suppliers in their respective GSTR-1 filed on the prescribed due date thereof.
Situation 2nd: Out of 200 invoices, 140 invoices involving GST of ₹ 5,00,000 have been uploaded by the

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