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GST Refund of ITC

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Vivek

Prporietor

41 Points Posted on 05 August 2020

Greetings of the day

I had started a business and for that broght capital items GST rate varies from item to item

Now business run for some 2 months and lockdown starts...

It was difficult to manage working capital and approach for partnership and started business in the name of Partnership with new GST no

Now had filled all the returns and utilized ITC balance on sale upto the stock I have purchased on proprietor ship

Have left balance in proprietor GST no

How can I claim that ITC??

Replies (2)

Quick Summary

This discussion addresses how to handle unused Input Tax Credit (ITC) when transitioning from a proprietorship to a partnership. While direct refunds of ITC balances are not possible, the credit can be set off against future sales tax liabilities. If cancelling the proprietorship, ITC on closing stock and capital goods used for less than 60 months must be reversed. Alternatively, inputs and capital goods can be transferred to the new partnership firm by issuing a tax invoice.

Sagar Patel

Tax and Business Consultant

5533 Points Posted on 05 August 2020

You can not get refund of ITC balance in your credit ledger. You can only set of your credit balance against output tax liability arise on sale of goods.

and if you are planning to cancel your propritership GST in near future, than at that time if you have any closing stock of Goods than you are required to reverse the credit taken on that stock.

And also note that at time of cancellation you have to reverse the credit of capital goods(fixed assets) purchase, ITC taken but if used for less than 60 months at time of cancellation.