Input tax credit

we take an input tax credit on the proforma invoice what should we do now...
Replies (5)
Quick Summary
This discussion clarifies how to handle input tax credit (ITC) when received on a proforma invoice before the actual tax bill is issued. The consensus is to raise a debit note referencing the proforma invoice and then claim the ITC against the original tax invoice when it arrives. It's also noted that claiming credit early might lead to interest charges, though this can be mitigated if the company has excess ITC available.

U can raise a debit note by mentioning the details of the proforma invoice by treating the proforma as the taxable invoice
Actually, we take an input tax credit on the proforma invoice which is given in June, and the bill comes in July
Raise a debit note for the proforma as said above and again take the input on the original tax invoice

Mr Sumit, it appears that there has been an early availment of credit. Credit of July has been availed in June and hence the company may have an exposure of interest for 1 month. No action is required. You may decided to pay interest now or wait for the department to demand. Further, if the company has excess ITC, then the interest also would not arise.

Sir, anything you pay against Profoma is treated as advance payment. book your expenses and input against original tax bill.. it may also be easy for you to check in future.

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