Input tax credit on Closing Stock
Hello Readers, Our previous post is on HSN and NAC under GST. So, In this post, we are going to discuss about “Input tax credit on Closing Stock“.
GST Council has raised the limit on input tax credit against excise duty payment to 60% from 40% of GST liability on items with tax rate above 18%, bringing some respite on sale of inventories stocked up before the implementation of the new tax regime on July 1.
In a major relief to traders and businessmen across the country, the GST Council has increased the limit on input tax credit to 60% against excise payments from 40% earlier on items with tax rates at 18% and above without excise payment receipts, bringing some respite on sale of inventories stocked up before the implementation of the new tax regime on July 1.
The input tax credit refund against excise on items with tax rates below 18% would remain at 40% of the total GST liability. Further, the council also ruled that entire 100% input tax credit against excise can be availed on high-value items above Rs 25,000 with a chassis number. It must be noted that the input tax credit refund against is already at the full value in cases where the excise payment receipt is available.
Hey , for more basics of GST refer our other posts by clicking here:
- What is GST?
- Advantages and Disadvantages of GST?
- E-Way bill?
- Exemption List under GST?
- Types of GST Taxes?
Points to Note:
Distributors and dealers had begun cutting down on the stock of goods lying with them ahead of the implementation of GST, as the earlier proposed rules provided for them to claim tax credit for only up to 40% of their total GST liability against the excise duty already paid on the goods purchased before July 1 without furnishing the original excise payment receipt.
However, with the increase in the limit of the input tax credit that they can claim, the companies could sigh a breath of relief as it would cushion the impact on sales in the month leading up to the levy of the new tax.
If you want to know about HSN and SAC of your business, Please feel free to mail us on firstname.lastname@example.org, We will reply as soon as possible.
Prakrati Jindal (Team Itslyf)
Input tax credit on closing stock
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