Implication of GST on Vat dealer_2

Input Tax Credit

Under the present sales tax system, a dealer is allowed to claim the tax credit of local goods purchases subject to certain conditions. He is not allowed to take the credit of sales tax on inter-state purchases and other taxes like excise duty, and service tax.

Under GST, input tax credit will be allowed for taxes in the nature of service tax, excise duty and inter- state tax as all these taxes will be subsumed in GST and one tax will be payable on all the sales. 

Further under GST, he will be allowed credit only for goods/services used for purpose of business, if goods/services used partly for the purpose of business and partly for other purposes, amount of credit shall be restricted to so much of the input tax as is attributable to the purposes of his business.

   

For claiming the input tax credit,he must have the following -

(a) Original tax invoice, debit note, supplementary invoice or such other taxpaying document issued  

by a registered supplier

(b) Has received the goods/services;

(c) Tax charged in respect of supply has been paid to appropriate authority

(d) Return has been furnished

(e) Where the goods are received in lots or installments against an invoice, he shall be entitled to the

Input tax credit upon receipt of the last lot or installment.

 Further, input tax credit of CGST (Central Goods and Service tax) can be utilized for making payment of CGST and like this input tax credit of SGST can be utilized to make payment of SGST. Input tax credit of SGST cannot be utilize to make payment of CGST and vice-versa.

                                                       

                                          

Accounts and other records under GST

1.      Following records to be maintained -

·         Inward or outward supply of goods/services

·         Stock of goods

·         Input tax credit availed

·         Output tax payable and paid

·         Such other particulars

2.      These records need to be maintained physically and can also be maintained in electronic form.

3.      Books of accounts and other records shall be retained for the period of 60 months from the last date of filing of Annual Return for the year pertaining to such accounts and records.

4.      Wherethe turnover during a financial year exceeds the prescribed limit,he will get his accounts audited by a chartered accountant or a cost accountant and shall submit to proper officer a copy of audited statement of accounts, reconciliation statement and other documents.