Input Tax Credit under GST Law

Input Tax Credit under GST Law Before understanding the Input tax credit under GST Law it is essential to understand the changes made in earlier Law i.e. CENVAT under Rule ,2004 to the new law. After giving the due consideration, it is clear from the given table bel ow that except few minor changes, Capital Goods under Rule 2(a) and Section 2[20] are same. As per Section 2(20) of GST Law As per 2(a) of CCR 2004 “capital goods” means: - (A) the following goods, namely:- (i) all goods falling within Chapter 82, Chapter 84, Chapter 85, Chapter 90, heading 6805, grinding wheels and the like, and parts thereof falling under heading 6804 of the Schedule to this Act; (ii) pollution control equipment; (iii) components, spares and accessories of the goods specified at (i) and (ii); (iv) moulds and dies, jigs and fixtures; (v) refractories and refractory materials; (vi) tubes and pipes and fittings thereof; (vii) storage tank; and (viii) motor vehicles other than those falling under tariff headings 8702, 8703, 8704, 8711 and their chassis but including dumpers and tippers used- (1) at the place of business for supply of goods; or (2) outside the place of business for generation of electricity for captive use at the place of business; or (3) for supply of services, "capital goods" means:- definition of “capital goods” is amended by notification no. 28/2012 dated 20.6.2012. (A) the following goods, namely:- (i) all goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90, heading no. 6805, grinding wheels and the like, and parts thereof falling under heading 6804 of the First Schedule to the Excise Tariff Act; (ii) pollution control equipment; (iii) components, spares and accessories of the goods specified at (i) and (ii); (iv) moulds and dies, jigs and fixtures; (v) refractories and refractory materials; (vi) tubes and pipes and fittings thereof; (vii) storage tank; and (viii) motor vehicles other than those falling under tariff headings 8702, 8703, 8704, 8711 and their chassis but including dumpers and tippers have been inserted w.e.f. 1.7.2012 used- (1) in the factory of the manufacturer of the final products, but does not include any equipment or appliance used in an office; or (1A) outside the factory of the manufacturer of the Final products for generation of electricity for captive use within the factory; or (2) for providing output service; (B) motor vehicle designed for transportation of goods including their chassis registered in the name of the supplier of service, when used for (i) supplying the service of renting of such motor vehicle; or (ii) transportation of inputs and capital goods used for supply of service; or (iii) supply of courier agency service; (C) motor vehicle designed to carry passengers including their chassis, registered in the name of the supplier of service, when used for supplying the service of- (i) transportation of passengers; or (ii) renting of such motor vehicle; or (iii) imparting motor driving skills; (D) Components, spares and accessories of motor vehicles which are capital goods for the taxable person. (B) motor vehicle designed for transportation of goods including their chassis registered in the name of the service provider, when used for- (i) providing an output service of renting of such motor vehicle; or (ii) transportation of inputs and capital goods used for providing an output service; or (iii) providing an output service of courier agency” (C) motor vehicle designed to carry passengers including their chassis, registered in the name of the provider of service, when used for providing output service of- (i) transportation of passengers; or (ii) renting of such motor vehicle; or (iii) imparting motor driving skills (D) components, spares and accessories of motor vehicles which are capital goods for the assessee After the comparison of both the definition of capital goods and under earlier law and new law it is v ery clear that both the definition at the most are same except few words here and there but it is copy of definition of Rule 2(a) of CCR,2004. Capital Good covered in Clause (A)(i) Chapter 82 : tools hand tools Knives etc Chapter 84 : machinery Chapter 85 : Electrical Machinery Chapter 90 : Measuring, Checking and testing machine Sub heading 6804 : Grinding wheel and the like and parts thereof Sub heading 6805 : Abrasive powder or grain on bas e of textile material, of paper, of paper board, or other material Description of tariff heading discussed in hereinbe fore is given as under. **** Tariff Heading Type of vehicle 8702 Motor vehicle for the transport of ten or mo re person, including the driver of persons (other than those specified in heading 8702) including station wagon and racing cars. 8704 Motor vehicle for transport of goods 8711 Motorcycle (including moped)and cycle fitted w ith an auxiliary motor, with or without side cars. Capital goods definition is enlarged to include mot or vehicle other than used for transportation of passengers and goods like cranes, forklift, tractor and all other vehicle primarily used for business or commerce for all kin d of service providers. What does not cover under the definition of motors vehicle provided under section 2(28) of the Motor Vehicle Act,1988.