CENVAT CREDIT

[PRANAB PANDA]

Dear All

We are following the procedure as laid down in Rule 4 Cenvat Credit Rules, 2004 at the time of availing Cenvat credit on input, capital goods and service.

What will the conditions for availing ITC on inward supply under GST era?

• Whether on receipt of inward supply
• Receipt of invoice/Challan
• Making Payment to the supplier

 

[DR.MARIAPPAN GOVINDARAJAN]

Even though there are many assumptions and presumptions, it will be clear only the enactments have been made and rules framed there under.

[Ganeshan Kalyani]

Sir , it is neither of the three instances as mentioned by you. It is totally depend on whether your supplier has paid the output tax or not. Only if he has paid the tax you will be allowed to take the credit, otherwise the credit would be rejected. Thanks.

[Ganeshan Kalyani]

Sir, however as rightly said by Sri Mariappan Sir sir the provision is still a draft and further changes in the draft is expected. Till the draft become an act nothing should be considered as final. Thanks.

[KASTURI SETHI]

Sh.Ganeshan Kalyani Ji,

Your views are crystal clear and full of logical as well as legal force. Why to waste time until or unless draft GST is converted into an ACT.

AI Summary

Input tax credit entitlement likely depends on supplier's discharge of output tax, pending final GST enactment.
Whether entitlement to input tax credit under GST arises on receipt of goods/services, on receipt of invoice, or on payment is unsettled pending enactment; current Cenvat practice may not apply. The discussion notes the draft GST may change and emphasizes that a prevalent practical view ties ITC availability to the supplier's payment of output tax, with denial of credit if the supplier has not discharged tax. Draft provisions should not be treated as final.