claim gst input credit

How To Claim GST Input Credit : Conditions To Be Satisfied

What Is GST Input Credit?

First of all, let us know what is GST Input Credit. Well, GST Input credit is nothing but a balance of the amount of tax you paid at the time of purchasing goods that is kept safe until you pay your tax for your output. Now, when you pay your tax of output, automatically the previous balance amount kept safe for you will automatically be used and your total tax to be paid will get reduced. We will also discuss how to claim GST input credit but before that, let’s understand by an example how this thing actually works

Example: Suppose X bought goods for Rs 100 and paid Rs 18 additional as GST(Total: Rs 118). Now X sold goods to Y for Rs 200 and charged GST of Rs 36(Total : Rs 236). Now, X can claim GST input credit of Rs 18 that he paid at the time of purchases while paying tax to the government. (i.e net GST, X need to pay is only Rs 18).

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gst input credit

Complete Guide : Will I Get The GST Input Credit Or Not?

Complete Guide : Will I Get The GST Input Credit Or Not? 

GST has been welcomed with all the pomp and show, and deservingly so. It has inherent advantages. We all know that amount paid as GST on purchases or even expenses can be claimed as GST input credit. This was not possible in the earlier regime of VAT and Service Tax. 

Example: If you were dealing in sale of goods where VAT was chargeable and had paid service tax for availing service of Chartered Accountant, you could not avail the credit of service tax paid to your CA against payment of VAT. This is now possible under GST since there is no difference in tax on goods or services. Now, if your VAT payable on goods sold is Rs 30,000, and if you availed services of a CA and paid GST of say, Rs 18,000, then you will get a GST input credit of Rs 18,000 against payment of Rs 30,000 GST payable. Hence, you net GST payable will be Rs 12,000 only.

Woaahh, what a relief to an entrepreneur. But, but, but, there is little sad news, just little.

There are certain expenses, on which credit will not be allowed.

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