Good Morning, Good Evening, Good Afternoon to everyone who
is watching me.
Sir, I would like to give my warmest greetings to that
person.
How are you all, sir?
We had started a great chapter in the last lecture.
The name of the chapter was Input Tax Credit.
We had started a basic discussion of Input Tax Credit.
What are the conditions when we have to pay our ITC, which
is the component of GST, which we have paid during the time
of purchases.
If I need credit for the tax I have paid during the time of
purchases, then what are the conditions for that.
Which conditions I will satisfy, only then I will be able
to avail the credit.
There were four conditions.
What was the first condition?
That I should have some proof.
Proof means some tax invoice, some debit note etc.
If I have an invoice, it proves that I have purchased from
that person.
What was the second point?
That I should have received the goods.
I should have received the goods.
The buyer should have received the goods.
We had also studied about Build to Ship to Model.
In the case of Build to Ship to Model, the registered
person, on whose orders the goods are going to a third
person, in that case also the registered person will be
considered that this is the registered person who has
received the goods.
And this is the registered person who can claim his ITC.
What was the third condition?
The third condition was that the supplier, the person with
whom you are purchasing, the person with whom you are
availing services, that person has deposited the tax in the
government's account.
Supplier has deposited the tax to the government.
This was also a condition.
And the fourth condition was that the purchaser, if you are
availing ITC, then you have deposited your GST return file
on time.
These were the four conditions.
And there were some related aspects which we covered in the
last lecture.
Now let's take this discussion a little further.
I think these are very basic things.
If you apply some common sense, then you can correlate all
these things.
If you want to buy ITC, show me the proof.
If you want to buy ITC for goods or services, have you
received it?
When will you get ITC?
When the government has already deposited the tax.
Who will do that? Supplier.
You have shown it in your return.
These are simple points.
There is nothing as such.
These were some points which we covered in the last lecture.
Now let's take this discussion a little further.
If depreciation is claimed on the tax component, then you
cannot avail ITC.
What is he trying to say?
Sir, what he is trying to say is that if you have claimed
depreciation on the tax component, then you cannot take ITC.
Sir, what is he trying to say?
Sir, what are you trying to tell us?
Till now, this chapter was a little easy to understand.
Then you told us such a thing which we could not understand.
Why do you do this, sir?
We are unknown, with many children.
Look, son, I am trying to say this.
Now understand with an example.
You bought a machine worth Rs. 1 lakh.
For example, you bought a machine worth Rs. 1 lakh.
And it had a GST rate of 18%.
So, your GST was Rs. 18,000.
So, what did you get for Rs.
The total that you will pay to your supplier.
Rs. 1,18,000.
For accounting purposes,
I am not talking about GST purposes.
I am talking about normal accounting purposes.
What happens from an accounting point of view?
My accountant, for example, does not have any knowledge of
GST.
He will give a simple example that
I have got a total bill of Rs. 1,18,000.
And he will see that the life of this machine will be of 10
years.
So, what will he do?
He will start claiming depreciation.
How will he take depreciation?
He will divide Rs. 1,18,000 by 10 years.
And he will keep claiming depreciation of Rs.
11,800 every year.
This is what we generally do.
This is what we do in accounting.
The total cost of the machine.
Because you write there, the cost of the machine.
The total cost of the machine.
And you claim depreciation.
Generally, this is what happens.
Now, what is he doing?
He is claiming depreciation on Rs. 1,18,000.
And he is claiming depreciation on Rs. 1,00,000.
Tell me, how?
See this.
Rs. 10,000.
10% of this.
And Rs. 1,18,000.
10% of Rs. 18,000.
This is what he is doing.
Now, let's come to the GST point of view.
According to the GST point of view, in GST, like you bought
any machine, any asset, any goods.
What will you say?
This is being used for my business purposes.
And when it is being used for my business purpose,
I want Input Tax Credit claim on it.
I want its ITC.
You will come here to claim ITC of Rs. 18,000.
You will go to the government and say,
Sir, give me ITC of Rs. 18,000.
I have bought it by paying tax during the time of purchase.
The government will say,
Son, come here.
You want ITC of Rs. 18,000.
Okay.
This is your demand no. 1.
You want benefit of Rs. 18,000.
Okay, I agree.
If you want benefit of Rs.
18,000, then why are you taking benefit of Rs.
1,800 here?
If you see, the benefit of Rs.
18,000, multiply it by 10 years.
This is the depreciation component.
It is the cost of fixed asset.
My GST is also on that fixed asset.
The total cost is Rs. 1,18,000.
Rs. 18,000 was the GST component.
Now, the depreciation I am claiming,
I am claiming it on the GST component as well.
Rs. 18,000, Rs.
18,000, Rs.
18,000, it will go on like this for 10 years.
What benefit will I get from it?
What benefit will I get?
Sir, I will get the benefit that when I make my profit and
loss account here, when I make my P&L account, then I will
claim the depreciation within 10 years.
I am not talking about 1 year.
I am talking about 10 years.
Within 10 years, I will have claimed extra depreciation of
Rs.
So, basically, the Rs.
18,000 that I had paid on GST, somewhere or the other,
I took the benefit of it.
Somewhere or the other,
I took the benefit of it.
And what is the second benefit that I am asking for?
The second benefit that I am asking for from the government
is that the Rs.
18,000 that I have paid on GST, its input tax credit,
please pay it.
Sir, think logically.
You want to take the benefit of it in two places.
You are saying that in GST,
I need its ITC as well.
And here you are saying that
I will claim the depreciation as well.
I will claim that within 10 years, the Rs.
18,000 will be recovered.
Rs. 18,000 will be paid only once.
But the benefit will be in two places.
Sir, do you think that the government will allow it?
The government will say that either you call it a horse or
call it smart.
What is this horse, smart, horse, smart?
Such things don't work, sir.
If you want the benefit, then you will get the benefit of
one thing only once.
You have paid Rs. 18,000.
Okay, agreed.
Either claim depreciation or claim the ITC of Rs.
If you want to claim the ITC, then don't take the
depreciation of Rs.
Then your depreciation in this case will be
Rs. 10,000.
Only depreciation of the value of this machine.
Then don't include Rs.
18,000 in the depreciation component.
And if you don't want to take the ITC, if you don't want
the ITC, if you don't have the liability of SHGST, then in
that case, claim the depreciation.
Your depreciation will be Rs.
1800 every year.
If you do it for 10 years, you will get the opposite
benefit of Rs.
This is the point, sir.
You can see.
See, what does it say?
What will happen under the Income Tax Act?
Under the Income Tax Act,
the ITC shall not be allowed.
Thus, in respect of tax paid on such items, dual benefit
cannot be claimed under the Income Tax as well as
GST law simultaneously.
In other words, either depreciation can be claimed or you
can claim depreciation under the Income Tax Act or ITC can
be availed under the GST law.
Either depreciation can be claimed or ITC can be availed
under the GST law.
Neither of the two can be claimed.
The point is clear.
Sir, things are very simple.
Their presentation has been done in such a way in the law,
that if the other person reads it for the first time,
he will feel, where have I come?
Sir, language makes things a little tough.
Common people are accessible so that things are not there.
Common people are not able to understand things so quickly.
They are not able to acquire knowledge so quickly.
Otherwise, if you look at it,
understand things roughly,
do you find anything tough in it?
All the things I have told you in ITC so far,
do you feel that something has gone over your head?
In a very normal tone,
I am trying to explain to you in a very normal way, sir.
And this chapter is such that,
this chapter is the foundation of your GST career.
If you understand this chapter,
I can say with confidence,
you will set your career on fire, sir.
And there is nothing in this.
Yes, I agree that language will be a little difficult,
but there is nothing in this that you will not be able to
understand.
I will try my best to make things very simple.
So that you do not have any difficulty in understanding.
Come on.
Next point,
the time limit for availing the ITC.
What is our time limit?
How long can we claim our ITC?
For example, I bought a stock on 1st April,
I bought a stock on 1st April,
I bought a stock on 1st May,
I am buying a stock on 1st June.
When I am buying a stock,
I will fill my GST during the time of purchase.
So what is the maximum date,
till when can I claim my ITC?
If it is taken in April,
do I have to do it in May or June?
Or can I do it anytime?
So he is talking about the due date,
till when you can file your ITC claim.
So see, with respect to time limit
to avail the ITC,
with respect to time limit
to avail the ITC,
it may be noted
that the return for the month of September is of 20th
October
and annual return is of 31st December.
See this first.
So till when do we have to file?
ITC on invoices pertaining to financial year or debit note
can be availed
till the due date of filing
written for the month of September.
So till when will you get September's return?
Which September?
Next year.
Not this year's September.
Next year's September's date.
For example,
let me explain it to you
so that it becomes clear.
So the return is from 1st April 2020
to 31st April 2021.
For example,
if this financial year is going on
and in April you get an invoice.
On 1st April 2020
you purchase something.
So till when do you have to file ITC?
Till when can you claim it?
You can claim it
either till 20th October 2021.
How did it come to 20th October 2021?
Can someone tell me
how did it come to 20th October 2021?
Sir, 20th October 2021 came in such a way
that it says
that it can be availed anytime
till the due date of filing
written for the month of September
of the succeeding financial year.
Next year when September's due date comes
to file the return
till then.
So that is 20th October 2021.
You don't have to look at this year's
you have to look at next year's September.
So the due date of September 2021
will come on 20th October 2021.
Or else
the date of filing the annual return
whichever is earlier.
Annual return goes on 31st December 2021.
Which year?
This year.
So whichever comes first
whichever is earlier
that will be your
that will be your date
till then you can file
maximum of any invoice you can file ITC claim
you can take ITC claim.
Is the point clear?
Or else
next year's September's return
its date
means 20th October
or this year's annual return
which will go on 31st December
that date
means 31st December
whichever is earlier.
This is the point sir.
See now.
Let's go to next point.
Section 16 was there.
Section 16 is covered by us.
Let's see.
Is there anything else?
Restriction on
ITC in proportion to taxable supplies business purpose.
What is he saying?
ITC is restricted in proportion
of the use of goods and services
in taxable zero rated
second for business and third rated
and fourth rated below.
And ITC is blocked.
So this was basically section 16.
These were the points of section 16.
Section 16 gave us some eligibility
some conditions
on which basis we get ITC.
What are the conditions
when we can get ITC?
You can take ITC claim.
We read four conditions.
Then we saw some points
their allied points.
We saw a point of depreciation
on which you can file your ITC.
For this lecture
next lecture is very important.
I will talk about some credits
some services and goods
which you don't get ITC.
There are some things
although they fall under
input goods definition
but still you don't get ITC.
What are they?
We will deal in next lecture.
For now let's stop here.
Thank you very much friends.