input on capital goods
Sunil (Partner) (21 Points)
27 June 2017
P C Agrawal
(Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad)
(8229 Points)
Replied 27 June 2017
Yes credit is available. But credit of SGST can be used for payment of SGST first and balance for IGST on outward supply. Credit of CGST can be used for payment of CGST first and balance for IGST. Credit for IGST can be used for IGST, CGST and SGST in that order.
Muthukumar
(Accountant/Adviser)
(174 Points)
Replied 27 June 2017
Input credit on job work is one of the nuances of the bill which is troubling manufacturers in the country. In this article, we are going to discuss the tax and input credit implications in case of goods sent for job work before and returned after the appointed date, in detail.
After purchase of capital goods and/or inputs a principal manufacturer may send he goods for further processing to a job worker, in such a situation the principal manufacturer will be allowed to take credit of tax paid on purchase of such specific goods send on job work.
A. Goods purchased may be send to job worker in the following manner:
ITC will be allowed in both the cases.
B. Effective date for goods send depends on place of business:
C. The goods send must be received back by the principal manufacture within the following period:
from date of being send out or receipt by job worker depending on place of business from where goods are send- Refer point- A & B
D. In case goods are not received within the period as mentioned in point-C above, such goods will be treated as supply from effective date and tax will be payable on such deemed supply and the challan issued will be treated as an invoice for such supply
A. Inputs, semi-finished goods or capital goods send on job work
must be dispatched along with a challan
B. The challan issued must include the following particulars:
C. The details of challan must be shown in FORM GSTR-1
E. Details of goods/capital goods sent to job worker and received back must be filed through Form GST ITC – 4
A considerable amount of time has been provided by the government to the job workers for returning goods to the principal holder. GST will help in maintaining transparency in the details of input credit on goods sent for job work.
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