Input tax credit cap where supplier charges higher state tax; excess credit disallowed for same line of business. The notification amends the Karnataka GST classification to restrict input tax credit where the supplier of an input service in the same line of business charges state tax above 2.5%; credit is allowable only to the extent of tax paid or payable at 2.5% on the input value, with any excess tax charged by the supplier disallowed. An illustrative motor cab example demonstrates the calculation. The amendment also substitutes wording for a service description, omits a related item, and removes specified Annexure entries.
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Input tax credit cap where supplier charges higher state tax; excess credit disallowed for same line of business.
The notification amends the Karnataka GST classification to restrict input tax credit where the supplier of an input service in the same line of business charges state tax above 2.5%; credit is allowable only to the extent of tax paid or payable at 2.5% on the input value, with any excess tax charged by the supplier disallowed. An illustrative motor cab example demonstrates the calculation. The amendment also substitutes wording for a service description, omits a related item, and removes specified Annexure entries.
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