Good Morning, Good Evening, Good Afternoon
How are you all?
Good? IITC chapter as you know
We had started in the last lecture
What was the basic concept of IITC?
The taxes you pay during purchases
You can take credit for that
Out of which?
Out of the output tax you pay
Means Tax collected from the customer
Minus that tax
Which I have paid during purchases
And the net liability
I have to deposit it to the government
We had discussed
Some basic points in the last lecture
Let's do some reading
Let's move ahead
Slowly Slowly You will understand everything
Like the song says
Slowly love will happen
Slowly You will understand the concept
Slowly Let's move ahead
Section 16
Every registered person shall be entitled to IITC
On inward supply of goods and services
That's it
What he is saying
Any registered person
Will get IITC
On what?
On inward supply of goods and services
Means purchases
Inward supply means purchases
Purchases goods
Avails services
On inward supply of goods and services
He will get IITC
On inward supply of goods and services
He will get IITC
But the condition is
He has to register in GST
If he is not registered in GST
Can he get IITC?
Read this line
What is the first line?
Every registered person
His registration in GST is mandatory
Come Second point
What is the second point?
He says that goods and services
Which he wants to get IITC
Means purchases
Avails services
If you want to get IITC
Tax credit
Tax on purchases
Credit Condition is
Goods and services
Should be used for business purpose
For example
This is my teaching business
I bought a mic
For 50,000
This is a mic for 50,000
And it has a GST of 9000
Can I take GST?
Can I take tax credit?
Answer is yes
Because this mic is being used
For my business purpose
Take a normal example
A businessman
He buys furniture
He buys a table
If he buys a table
Suppose he buys a table for 10,000
And for 1000
He pays GST
Now that 1000
He has paid GST
Can he take tax credit?
Answer is yes
Condition is
That table should not be placed in his house
That table should be used for his business purpose
Sir There is a man
He has a business of footwear
He sells sandals, sandals
Sir, he has a lot of sandals
From Ludhiana, Punjab
He bought
Purchased from Ludhiana, Punjab
Now he has a girlfriend
His girlfriend says
Give me a pair of sandals
What does she say?
She says
Give me a pair of sandals
She says
Give me a pair of sandals
He says
I have purchased sandals
How can I give you expensive sandals?
Sir, suppose
If she agrees
In this case, she says
Give me a pair of sandals
If she says
Give me a pair of sandals
What will happen?
She says
Give me a pair of sandals
He says
He has a stock
He has given that stock to a foreigner
Now, the stock he has given to a foreigner
The stock he had bought with GST
The stock of that stock
Which has reached the foreigner
Can he claim GST, ITC, Tax Credit?
Answer is no
Is he being used for business purpose?
The stock he has given to a foreigner
Is not for business purpose
It is for personal purpose
I have given sandals to my girlfriend
She says
Give me a pair of sandals
He says
I have given her sandals
How can I claim tax credit?
It is not for business purpose
There is a man
Who develops computer software
I have developed computer software
Whatever fees I give to the software engineer
I can claim tax credit for that
As long as the software is not for business purpose
Suppose, I tell the software engineer
I tell the software engineer
Do one thing
Make a game for my son
Make a game for him
Do game designing
Is this game designing
Is being done for business purpose?
I am making game designing for personal purpose
I am making it for my son's game
I am making it for that
In that case also
You will not get ITC
The main condition is
Whatever goods you are buying
You will use it for business purpose
Only then
You will get ITC
Remember this point
My girlfriend says
Give me sandals
If I say no
Because I am saying no
Because he is a smart man
If I say no
I can claim ITC
If I say yes
I can't claim ITC
Why he is saying no
Let's talk about conditions
Read this line
ITC of GST
ITC of GST will be available
On goods and services
Which are used in the course of
Furtherance of business
Thus, tax paid on goods and services
Which are used for
Non-business purpose
Cannot be availed as credit
Come on
Come on conditions
Some conditions
These are the conditions
If you follow these conditions
You can avail tax credit
Sir, what are those conditions?
There are no conditions
Don't use your brain
Use common sense
There is nothing to worry
You should have a document
A paper
Do you have a legal document?
Which proves that
You have purchased
Do you have a legal document?
Think about it
What documents can justify your purchase
First of all
Do I have an invoice?
Do I have a bill?
Do I have an invoice?
This will prove that
A certain person has sold this
He has purchased from a certain person
So, first of all
I should have an invoice
Very good
Second condition
I should have received those goods
Against goods and services
I want to take ITC
I should have received those goods
If I am not receiving those goods
How can I say that
It is for business
It is for personal
How can I claim ITC
I should have received those goods
Third condition
I am paying tax
As a customer
I am paying tax
For example
The final sale was for Rs.
The customer had to pay tax of
UAH 1500 as well
The customer
The customer bought the goods for
UAH 1500
So, the customer paid the tax
The customer is paying the tax
May the supplier
May the supplier should be able to pay that tax
So we're going to discuss, I'm just telling you from the
top, that the person you're buying from, you're purchasing
from, you're paying tax to that person. That person has
paid the tax to the government.
This is also a condition, sir.
This is also a condition.
And the fourth condition is that you furnished your GST
return.
In that, you have shown all the details that, brother, I
have purchased from this person, at this rate.
This was the rate of GST.
You are free to use, you are free to utilize your ITC in
any proportion, in any manner as desired by you.
He will be entitled to ITC on supply if all the conditions
are fulfilled.
What does point A say?
That he should be having the following documents.
What? He has the invoice.
or a revised invoice, or a debit note
or a document of the input service distributor
You should have all these documents
Basically, you should have a proof, a legal document which
can prove that you have made purchases that you have bought
the goods
Come here
What details should be included in these documents?
First of all, it will tell you the description of the goods
that what goods have you bought
What value of goods have you bought And most importantly,
you are taking a tax credit
So the most important thing is that it should be written
that how much tax have you paid
How much tax have you paid
At what rate have you paid the tax
Which tax have you paid? Have you paid CGST, HDST?
Or have you paid IGST?
So basically, the details of the tax are very important in
the invoice
It should be mentioned
Look at the document
The one on which you are taking ITC, all the details should
be there
Tax Charts, Description of Goods
Value of Supply
GSTN number of the supplier and the receiver Place of
Supply, look at the chapter of Place of Supply
Okay?
If you pay a tax in the case of fraud
If you have a case of fraud
It will be proved that you have committed a fraud
In GST, frauds are very common
It will be proved that you have committed a fraud
Now because of that fraud, you have to pay a penalty You
have to pay a fine, you have to pay an old tax
So will you get a tax credit for that also in that case?
Sir, the answer is No
You will not get it in that case
What we are saying here is that The business that you are
doing
To do that business, you have to pay a tax credit for the
goods and services
The goods and services that you purchase You will get a tax
credit for that
If you buy a stock
You will get a tax credit for the time you bought the stock
But the fraud that you are doing
You are doing a wrong thing
Because of doing a wrong thing, you have to pay a penalty,
you have to pay a fine Sir, in that case, will we give a
tax credit for that?
In that case, you will be punished
Sir, we have simplified your system so much
Even after that, you are doing a fraud
Sir, you are paying a tax at the time of fraud You have
nothing to do with that
You cannot claim ITC for that
Look at this Tax paid in pursuance of any order
Where any demand has been confirmed
Due to fraud Suppression of facts, that cannot be availed as
ITC
This is the point
You should have an invoice
In the invoice, it should be written What goods have you
purchased?
How much tax rate have you purchased?
Whether it is CGST, SGST or IGST If you can see all these
things
If you have all these things
Then you are eligible to avail ITC Sir, look at this
I want to explain a small thing Related to this
Look at this
This is a seller
And this is a purchaser
You can buy this
One is a seller and the other is a buyer
In GST, there is a system
When you will read further
In GST, there is a system
Whenever this seller does some sales
Whenever he does some sales
Then he gets a return of GSTR 1
Then he gets a return
Then he gets a statement
You can call it a statement
In that statement, he has to show What sales I have done
At what rate To which person
What am I saying?
I am saying There is a system
In GST
Whenever a seller sells something
Till a particular date
All the details have to be shown in a statement
That statement is called GSTR 1
That statement tells us
That the seller
How many sales he has done
How many value sales he has done
What was the tax on those sales
That he has collected from the buyer
And at what rate
He has collected the tax
Okay Very good
Sir, the details you put in GSTR 1
All these details automatically
Autopopulate in GSTR 2A
And what is GSTR 2A?
GSTR 2A is exactly
The same as the seller's
But in the case of the buyer
You have to submit the details
But the details of purchases
Means Means
If GSTR 1 is filled by the seller
Then GSTR 2A
Basically the purchase details
The buyer has to fill the purchase details
Does he fill it manually?
Or will he manually enter?
No sir, there is no need to pass manual entries
There is no Requirement as such
To do any manual entries
Whatever details you fill in GSTR 1 Our seller will fill
Whatever details the seller fills in GSTR 1
That as it is details
Autopopulate The buyer's GSTR 2A
Comes in
Which becomes the purchase details
For example
I sold you this pen
I will put the details in my GSTR 1
That Mr.
Shyam or Mr.
I sold this pen
If GSTR 2A is Rs.
Then the purchase details are Rs.
If you go to the portal
And log in
When you see your GSTR 2A
You will see the purchase details
You have purchased from me
I have sold you
I have written the sales details
That I have sold someone
At this rate
Do you have to file the return of your purchase?
Do you have to give the purchase statement?
Now when you give the purchase statement
This entry will be autopopulated
Which I have put
In my sales statement
In that
Your purchase entry will come
In the purchase statement
That there is a purchase of Rs.
And Rs.
18 GST
You have paid me
Autopopulate
What a solid system the government has made
You fraud entries
You can't fake entries
Earlier it was possible for once
But now it is not possible
That you show false purchases
How will you show?
You are buying from a registered person This liability is
mandatory on the registered person
He has to give his sales details
And as soon as he puts his sales entry
It is mandatory on you too
That you have to give the purchase statement
So as soon as he puts the sales entry
It will be shown in your purchase statement
How will you fake?
Sir, so why are you telling us this Ram story?
Have we asked you?
Why are you telling us this Ram story?
What is the need of this Ram story?
Brother, the need is
The need is I am not telling you such things
Such things
What has happened? I have no interest in telling such things
You understand my concern
I want to say that
We have just read that on the basis of invoice
On the basis of invoice
You are getting the credit of ITC
But sir, these invoices
The condition in this is
The seller
In his GSTR-1
The invoice
Means the invoice of his sales
Uploaded
The invoices uploaded by the seller
The buyer will get its credit
100% Credit allowed 100% To buyer
Did you understand this?
We are reading the condition
That if you have the invoice
Then you can take the credit of the tax
The extension of this point is
That if the seller
Is doing your sales
You have shown the details of the sales
In your GSTR-1
On time
You have shown it in your GSTR-1
Then it will be proved
That the seller has done our sales
In our GSTR-2
That detail will come
That yes, we have also bought it from that person
From here, he will put it in the sales statement
In GSTR-1
From here, it will come in 2A
Things will be checked
Cross verified
This proof
I will have an evidence
That yes, I have purchased from this person
I will get the credit of the tax
Sir, will I get all the tax paid?
The answer is yes
Because now it has been proved
That from which person you have purchased
The person from whom you have purchased
He himself will come and tell you in GSTR-1
That yes, I have sold this person
I have the evidence
Okay sir
Mr. Modi, wow
You have brought a very good system
This means that no one can cheat here.
What a system you have made, sir.
The seller will put the detail that I have made a sale,
then the detail will reach the purchaser that he has also
purchased.
Very good, sir.
The things will also be cross-verified.
And the tax credit will also be received, all that too.
Very good, sir.
Modiji, very good.
This is the system.
This is called holding.
This is called good days.
Sir, but it is also possible that the seller...
The seller...
There are due dates for this.
GSTR 1, you have to fill up to this date.
GSTR 2, it will go up to here.
Then, the GSTR 3 that goes ahead, its dates are different.
As it goes ahead, I will discuss about it.
Look, there are due dates for this, sir.
Now, it is also possible that the due date has come, and
the day the due date was there, his child was born in the
house of the seller.
The day the due date was there, his child was married in
the house.
The day the due date was there, someone died.
The day the due date was there, my mother-in-law came and
sat in my house.
So, what should I do?
First, I will file GSTR 1.
First, I will finish my personal work.
Sir, sometimes, personal responsibilities also become so
much.
And sometimes, relatives have to take care, have to see
things.
How can I ignore it?
Sir, how can I ignore it?
In that case,
the seller made a mistake.
The seller forgot to include the details of his sales.
The seller did not include the details of his sales in his
GSTR 1.
The poor fellow forgot.
The poor fellow did not get time.
He would have included it.
It was in his mind, but he forgot to include it.
The poor fellow did not get time.
The due date has come.
Now, what should we do?
How will that person get credit?
You forgot to include it.
You had a child's function at home.
The child was pregnant.
The child was getting married.
The mother-in-law came and sat.
The child became bald.
He became pregnant.
He is riding a three-wheeled cycle.
And the baldness of the child reminds you that I did not
file my GSTR 1.
If not today, then tomorrow, my buyer will call me.
He will ask me to file my GSTR 1.
If I do not file it, then I will not get the details of my
purchases.
And if I do not get the details of my purchases, then how
will I get my tax credit?
The point is this.
The question is this.
Assume that the seller forgot to include the details of his
sales.
In that case, should the buyer get the ITC?
Sometimes, there can be genuine reasons when the seller
forgets to include the details of his sales.
It is quite easily possible.
Quite possible.
There can be such functions at home.
There can be such circumstances.
There can be unavoidable circumstances that I forget to
include the details of my sales.
Should I kill that poor man for this?
That poor man will not be able to get the ITC.
Is this a good thing?
The whole mechanism of Modi Ji will be in a mess.
Sir, he will not be able to get the ITC.
Please understand his problem.
And if he does not get the ITC, then the tax that he is
paying will be added to his cost.
And if it is added to the cost, then he will have to pay
tax on it.
It will be tax on tax.
The prices of things will become expensive.
Where will our country go?
The whole purpose of GST will be defeated.
Now, tell me again.
If the seller, due to genuine mistake, due to genuine
hardship, if he is not able to fill the details,
then in that case, the buyer,
even if he gets a little less, should he get the ITC credit?
The answer is yes.
But do not give him so much credit that he starts doing
fraud in a genuine way.
Do not give him so much.
So the government said, okay, if you forget, you are a
seller, sometimes you have genuine reasons, you forget.
No problem.
In that case, do not bother the buyer.
We will tell the buyer, do one thing, take up to 5% maximum.
Maximum 5% of invoice uploaded.
Take the ITC for this.
Maximum up to 5%.
Meaning, the invoice I have uploaded, I can take all the
credit for it.
Whatever invoice the seller has uploaded in his GST 1,
I can take all the credit for it as a buyer.
But the invoice he has not uploaded,
even in that case, I can take a little credit.
But what is the maximum? 5% of the invoice is uploaded.
Look at this.
Can you see till here?
Okay.
I have made purchases worth 1 crore.
Out of the purchases worth 1 crore, the purchases worth 50
lakhs are those which the seller has shown in his GST 1.
Out of the purchases worth 1 crore, the purchases worth 50
lakhs are those which the seller has shown in his GST 1.
According to 18%, it is GST.
Meaning, GST worth 9 lakhs is made.
Details have been uploaded in the GST 1 by the seller.
Can the buyer take credit?
Details have been uploaded.
I am saying this.
They have been uploaded.
Can the buyer take credit?
Answer is yes.
He will take.
Now understand this.
Purchases worth 50 lakhs are those whose details have not
been uploaded by the seller.
Now in this case, can the buyer take credit?
He can take.
But what is the maximum? 5% of the invoice is uploaded.
5% of the tax.
So, he can take credit of maximum 5% of 9 lakhs.
This is the case.
Is the point clear?
Look at it.
Let's move ahead.
Look at it.
Look at the screen.
What does it say?
Read the red point.
ITC and all the invoices or debit notes which are furnished
by the supplier in their GST 1 can be availed in full.
Receiver gets the detail of the tax invoices and the debit
note furnished by the supplier in their GST 1, in his GST
2A and 2B.
However, in respect of the invoices,
debit notes, the details of which are not furnished by the
supplier.
The poor guy could not furnish the details.
What will happen in that case?
Details of which are not furnished by the supplier in GST 1
and hence cannot be seen in GST 2A and 2B.
In that case,
ITC can be availed up to 5%, 5% of the eligible credit in
respect of those invoices
whose details have been uploaded.
If you want to understand it in that way, then understand
it this way.
If you want to understand it in a different way, then
understand it this way.
Whatever the details of the invoices which have been
uploaded by the supplier,
whatever the details of the invoices which have been
uploaded by the supplier,
make it 105%.
You can avail as much credit as possible.
Balance ITC can be claimed by the taxpayer in any of the
succeeding months provided details of the invoices is
furnished by the seller.
Let's see this example.
It will be clear from this example that
Vijay Sales is a supplier which receives 100 invoices of
purchases involving GST of Rs.
10 lakh
from various suppliers during the month of October.
He has made purchases and how much has he made?
He has 100 invoices.
He has 100 bills of purchases.
And the GST involved in this is Rs.
10 lakh from various suppliers during the month of October.
Out of 100 invoices, see the amount is Rs.
10 lakh.
Out of 100 invoices, 80 invoices in which GST is Rs.
6 lakh
has been furnished by the supplier in his GST R1.
That means he has filled the details.
He has filled the details of Rs. 6 lakh.
And if he has filled the details of Rs.
6 lakh then the buyer can take his ITC.
I will get his ITC.
Compute the ITC that can be claimed by Vijay Sales for the
month of October.
He will get 100% of Rs. 6 lakh.
There are 20 invoices in which Rs.
4 lakh
GST is involved.
But the seller has not furnished the details in his GST R1.
What is the third condition? I told you that there is no
Ram or Kani. It was a simple point.
It's done. Come to the third condition.
Second last. What does it say? Tax leviable on the supplies
actually paid to the government.
It shouldn't be that I am a customer. Like I am a buyer.
If I am a buyer, then I have paid tax on Saidar Kaur.
It is an item of Rs. 1000, tax of Rs. 200.
So I have paid him a payment of Rs. 1200.
But it shouldn't be that the Rs.
200 that he has collected from me in the name of tax, he
has not paid that tax to the government.
When the tax will reach the government, then only the
government will give you the credit.
When the money didn't reach the government, then what
benefit should I give you?
So sir, this is what I want to say.
If the supplier has deposited the tax to the government, he
has collected it from you and deposited it to the
government, then only the government will give you the
credit of that tax.
That is the point.
There is no need to think much.
Read three lines and move ahead.
His claim for ITC gets confirmed only when the supplier
deposits the tax so collected to the government.
Your claim will not be sanctioned until the government
doesn't deposit the supplier tax.
And what is the last condition?
That the registered person taking the ITC must have filed
his return.
Presently, at summary return, GST goes to 3B on a monthly
basis.
The taxpayer should file his return to avail GST.
Otherwise, the taxpayer should have filed his return.
The registered person who wants to take ITC, that person
should file his GST return.
Without that, he cannot take the credit of ITC.
Sir, I have read four conditions.
First, you should have an invoice.
After the invoice, the goods should be received to you.
Yes, you can go to another person on your instructions.
Very good.
Third, the supplier should deposit the tax to the
government.
And what is the fourth condition?
This is the fourth point.
The buyer should have filed his GST return.
Okay, sir?
Look at this.
Goods received in the lots.
So, what should we do?
It happens that the goods are being received in lots and
not at the same time.
Take the example of Sariya.
I asked for a Sariya worth 1 crore.
He said, I am also getting Sariya from somewhere.
And I also need some time.
Do one thing.
Give me a week's time.
In one week, I will give you a Sariya worth 25 lakhs.
In the second week, I will give you a Sariya worth 25 lakhs.
In the third week, I will give you a Sariya worth 25 lakhs.
And in the fourth week, I will give you a Sariya worth 25
lakhs.
This is how he dealt.
He said, okay.
Now, what should we do?
Should I claim ITC only when I have received a Sariya worth
25 lakhs?
Or should I claim ITC only when the last Sariya arrives?
Sir, in that case, he says, if you are receiving goods in
lots, in that case, on the receipt of the last lot, only
then you will be able to claim ITC.
Look at this.
In case goods covered under the invoice, they are not
received in a single consignment.
But they are received in the lots.
So, ITC can be taken only on the receipt of the last lot.
When you receive the last delivery, when you receive the
last consignment, when you open it, when you confirm that
yes, the order I placed, the order has arrived, then only
you will be able to file the claim of ITC.
then only you will be able to file the claim of ITC.
These are the small conditions of the last lot.
The payment, the payment to the supplier should reach
within 180 days.
Look, this is such a powerful mechanism made by the
government.
Earlier, it used to happen that a person purchased and the
seller used to run after him that sir, you took the goods,
you took the loan as well.
I told you to pay within 1-2 months.
What happened, sir?
Where is the payment for the goods, sir?
The buyer used to say, yes, I will do it tomorrow,
I will do it day after tomorrow,
I will do it after a month.
He used to make many excuses.
But will his excuses work now?
Sir, his excuses will not work.
There is a condition here that the seller should get the
payment within 180 days.
If you do not get the payment and the buyer has taken the
ITC, then the ITC has to be shown as a liability.
The ITC has to be reversed.
And not only this, the ITC has to be reversed and the
interest will be 18% as well.
You had saved money there, within 180 days, you did not pay
the poor seller.
And you took the ITC as well.
Return the ITC.
Reverse it.
You will reverse it and you will pay 18% interest as well.
Assume tomorrow, after 180 days, the ITC has been reversed.
He took the ITC, but could not fulfill the condition of 180
days.
So what happened?
He reversed it and paid the interest.
Assume after a month or two, he was sleeping in his dream
and in his dream,
Lord Satyanarayan came to him and said,
Son, do one thing.
You have done a very wrong thing.
You have paid the poor seller.
If you do not pay him tomorrow morning, before 10 am, then
I will destroy you.
You will suffer a lot.
He said,
Lord, it is good that you came in my dream.
I will really pay him.
I will pay him only at 6 am.
Do not destroy me.
I have made my empire by cheating people.
From where will I make my empire again?
Lord Satyanarayan said,
Son, it is like this.
It is a commitment.
Payment should reach the poor man at 6 am.
Lord Satyanarayan became enlightened.
Glory to Lord Satyanarayan!
At 6 am, the buyer pays with net banking.
He has reformed.
He has reformed his mistake.
He has made all the payments.
He has made the tax payment.
He has made the payment of goods.
He has made the payment of tax.
Can he take the ITC now?
First he took it.
Then he got it reversed.
Now he has made the payment.
Can he take the ITC now?
Answer is yes.
You have become a decent man.
You have made the payment of the poor seller.
Modiji will say, take it with pleasure.
We don't have any problem.
You have made the payment.
This is the point.
A registered person has to make the payment to the supplier
within 180 days.
In the event of failure, the corresponding credit will be
added to the liability of the output tax.
Interest will be paid at the rate when the amount added to
the output tax liability is paid.
However, once the receiver makes the payment of the value
of the goods and the tax, he will be entitled to avail the
credit again without any time limit.
You don't have any time limit.
You can take your credit as long as you want.
Let's stop here.
There are a few more conditions.
If I go on, it will be too long.
You will lose your interest.
But did you enjoy today?
There were some basic conditions of ITC.
Basically, when you have to avail ITC.
You get it, but under what conditions you get ITC.
Hope so, sir.
We will meet in the next lecture.
We will take this topic further.
Bye.