Input tax credit ratio identifies wrongful credit claims and under valuation risks in GST returns and accounts. The manual prescribes diagnostic ratios-notably Input Tax Credit to Total Tax Paid, inward supply cost to outward supply value, credit on capital goods to additions to plant & machinery, and ratios for exempt/zero/non GST supplies-to detect wrongful credit availment, under valuation of outward supplies, non payment of tax on clearances, and misclassification of supplies. These ratios are to be computed from GST returns and financial statements (trial balance, P&L, balance sheet, fixed asset schedules) with trend and peer comparisons and adjusted for export treatment and exclusion of GST from sales where applicable.
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Provisions expressly mentioned in the judgment/order text.
Input tax credit ratio identifies wrongful credit claims and under valuation risks in GST returns and accounts.
The manual prescribes diagnostic ratios-notably Input Tax Credit to Total Tax Paid, inward supply cost to outward supply value, credit on capital goods to additions to plant & machinery, and ratios for exempt/zero/non GST supplies-to detect wrongful credit availment, under valuation of outward supplies, non payment of tax on clearances, and misclassification of supplies. These ratios are to be computed from GST returns and financial statements (trial balance, P&L, balance sheet, fixed asset schedules) with trend and peer comparisons and adjusted for export treatment and exclusion of GST from sales where applicable.
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