Hello friends, good morning, good evening, good afternoon.
How are you all?
I welcome you all to a new lecture.
Till now we were discussing about ITC.
What is ITC? What are its eligibility? What are its
conditions? How is it available?
In which conditions and scenarios is it available? When is
it not available?
After that we started discussing about blocked credit.
What exactly is blocked credit?
There are some goods and services.
They fall under different definition of inputs.
They can be input services or input goods.
But still you don't get any credit on them in GST.
What treatment was to be done? What were those things?
We had read, understood and listened to all those things in
the last lecture.
And we had placed all those things in our mind.
Friends, today is a new morning, a new day, a new lecture.
As I always say, whenever a new morning comes,
it brings a ray of hope.
Whenever a new day comes,
whenever the sun rises,
it indirectly tells you to get up.
Get up with me.
As I am getting up in the day, you also get up in your life.
What happened in the last day?
Whether it was negative or positive, whatever it was, leave
it there.
But start from here.
Start fresh.
Every day you get a new life, a new birth.
Every morning brings a new opportunity for you.
That today you will be better than the previous day.
That's why whatever happened in the last day in life,
forget it there.
Now start a new fresh.
Maybe in the fresh start, you know what mistakes I have
done in the last day.
Get rid of those mistakes.
And today start a fresh line of thought.
Today I am teaching you a fresh section.
Section 18.
Section 18 is a very simple section.
People have created a hype in the market that what is there
and what is not there.
But there is nothing in it.
Section 18 tells you two simple scenarios.
What exactly happens?
Sir, exactly what happens is that
when you take registration in the new GST, like there is a
liability in this.
If your turnover is more than 20 lakhs,
then you will have to register in GST.
If your turnover exceeds 20 lakhs or 40 lakhs,
now you have to compulsorily register under GST.
You will have to take compulsorily registration.
After that, friends, our point comes that
suppose you are in the composition levy, your turnover in
the last year was less than 1.5 crores.
Your turnover was less than 1.5 crores.
So you thought that I will become a composition supplier.
And when you are a composition supplier,
you cannot collect tax from the customer.
You don't collect tax from the customer.
On the total supply you have,
you directly deposit a percentage of your tax to the
government.
But suppose you are a composition supplier, you suddenly
thought that
I will leave the composition scheme and shift to the
regular scheme.
It is also possible that your turnover is more than 1.5
crores.
Your turnover has exceeded 1.5 crores.
And as soon as your turnover exceeds 1.5 crores,
you will have to leave the composition scheme
and shift to the regular scheme.
It is also possible that you were doing such supplies
earlier which were exempt supplies.
To make an exempt supply, goods and services were required.
Suppose you were doing such supplies which were exempt
earlier
and suddenly you got a notification from the government.
The government is an expert in issuing notifications.
The government is an expert in issuing announcements day
and night.
This is the Modi government.
It works in a snap.
Do you remember that day?
Friends, from 8 o'clock tonight,
500 and 1000 rupees notes will be closed forever.
Do you remember that notification?
Sir, that also came day and night.
So, when a notification of 500,000 can come day and night,
then day and night this notification can also come
that there was an exempt supply.
And now that exempt supply will become a taxable supply.
And the GST rate will be charged at such and such
percentage.
On that particular supply,
which was earlier exempt and has now become taxable.
Is it possible, sir?
There are such scenarios.
What is common in these scenarios?
If you want to understand.
I have told you 3-4 scenarios.
Let me tell you one more scenario.
Earlier, you did not have any liability of GST.
You did not even register in GST.
You did not register in GST.
But now you felt that the society is moving forward.
Our economy is growing.
It is possible that next year my turnover will be so high
that I will have to register in GST.
It is an ethical practice.
We also feel that we are also sitting in the market.
We are competing with other dealers and suppliers.
So, you voluntarily got your GST registration done.
Is it possible?
You can take voluntary registration under GST.
It is absolutely possible.
You voluntarily got your GST registered.
So, you have 4 cases.
Earlier, you were a composition supplier.
From a composition supplier, you have now become a regular
taxpayer.
There was an exempt supply for you.
Now, it has become a taxable supply.
Earlier, you did not have a provision supply for GST.
But now your turnover has exceeded.
So, now you have to register.
Earlier, you did not register in GST.
Now, you are taking a voluntary registration under GST.
You have 4 cases.
In these 4 cases,
if you see,
what is the common point?
The common point is that
earlier,
there was no liability in GST.
And neither did you have any claim for input tax.
What did I say?
What I am trying to say is that
you were a composition supplier.
So, can a composition supplier take ITC on his purchases?
Did anyone say yes?
If you say yes, then understand
what I will do to you.
You do not know that I am a dangerous person.
You do not know anything about me.
Sir, he is a composition supplier.
We have read in the last lecture
that when a composition supplier
cannot collect tax on output from the customer,
then what will he get as input tax credit?
Tell me.
He cannot get input tax credit.
A composition supplier cannot get ITC.
But now, when he is leaving the composition scheme
and taking a registration in his normal scheme, will he get
ITC then?
This is my question.
Will he get ITC then?
Assume that he is a composition supplier.
Think and tell me.
Will he get ITC or not?
Till 1st July 2022,
he is in the composition scheme.
His turnover exceeds Rs. 1.5 crores.
And now he has to take a mandatory registration
in his normal scheme.
Mandatorily, on 2nd July,
or assume on 1st July,
he comes in the normal scheme.
Leaving the composition scheme,
he comes in the normal scheme.
What will he do?
What should he do?
Look at this.
If he comes in the normal scheme,
leaving the composition scheme,
then in that case,
till this date,
he did not have to get ITC.
Before this date,
did he have any claim of ITC?
Did he have any claim of ITC?
Here, he did not have any claim of ITC.
But here,
he can get ITC from here.
Look at what I am saying.
Whatever he did here,
he will not get ITC.
Do you believe this?
Before this date,
he will not get any ITC.
But when he starts from here,
a fresh start,
he will take a normal registration,
then he will get his ITC.
After that,
the goods he is buying,
the purchases he is doing,
the services he is taking,
he can get his ITC.
Assume,
if I purchase something on 8th August,
if I purchase something on 8th August, can I get his ITC?
The answer is,
yes, you can.
If I purchase something on 5th July,
can I get his ITC?
The answer is,
yes, you can.
If I purchase something on 1st July,
can I get his ITC?
The answer is,
yes, you can.
Why can I get it?
Because now I am in the normal scheme.
And in the normal scheme,
if you buy something for business purpose,
intended to be used for the purpose of business,
the right to claim it's ITC, but okay.
Sir, now I have a question for you, I have a question for
you.
Here, let's say, it's 25th June, it's 25th June.
On 25th June, I bought some goods and services.
And those goods and services, let's say, for 5-6 days, my
work was closed.
I couldn't do any sale.
For 5-6 days, my work was closed.
I couldn't do any sale.
In the composition scheme, I didn't do any sale.
Till 30th June, those goods and services, as it is, were
lying around.
Till 30th June, those goods and services, as it is, were
lying around.
On 1st July, a customer came to me.
And the customer came to me on 1st July.
And on 1st July, I sold those goods and services, as it is.
I sold those goods and services, as it is.
I did a sale in the normal scheme.
I cut the invoice and charged GST on that invoice.
Did you understand the case? What did I say? I said that
you are a registered person from 1st July.
I accepted it.
You come in the normal scheme.
I accepted it.
After 1st July, whatever you buy, you can claim it's ITC.
You have all the rights.
Okay. Now, before 1st July, I have done some purchases.
In the composition scheme, I didn't do any sale or anything.
There are purchases.
I have kept those purchases.
30th June has come.
In the future, I will utilize those purchases in the normal
scheme.
Now, should I get the ITC of that thing? Sir, I have bought
goods and services.
And I want to sell it in the normal scheme.
I don't want to sell it in the composition scheme.
Now, should I get the ITC of that thing? Now, tell me.
Answer is yes.
You will get everything.
You are buying goods and services.
If you want to sell it in the normal scheme, then what is
the problem? These are goods and services.
They are being used for the purpose of business.
You will get the ITC.
What is the problem? Sir, provision says that 1 day before,
if you are taking registration here, 1 day before that,
means 30th June.
On 30th June, whatever goods you have, if you have
semi-finished goods, if you have finished goods, if you
have stocks, you can get the ITC of that.
I want to tell you a simple thing.
Whatever inputs you have, if you have stocks, if you have
finished goods, if you have capital goods, in some cases
there are capital goods, like in this case there are
capital goods also.
You bought a machine, you purchased a machine and whatever
you were making from the machine, whatever production you
were doing, you were doing it under the composition scheme.
You used to make an output from the machine.
You used to sell the output as a composition scheme.
You did not collect tax from the customer.
So, it is obvious that when you are not collecting tax from
the customer, then you cannot take the ITC of that machine.
Now, what happened from 1st July? From 1st July, you
registered as a normal tax payer.
You converted it.
You left the composition scheme there.
Now, your machine, why will it be used? To sell normal
goods and services.
Normal goods and services will be produced.
Normal goods will be produced and you will sell it in a
normal way.
If you sell it properly, you will cut the invoice and on
that invoice, you will collect the amount of GST from the
customer.
Now, in this new scenario, will you get the ITC of that old
machine? The answer is yes.
Will you get all of it? Now, think about it.
Will you get all of it? I bought a machine worth Rs.
1 lakh or say I bought a machine worth Rs.
10 lakh and I got the
GST of Rs. 1 lakh. Earlier, I was not claiming GST. I was
not claiming ITC. I bought a machine.
The machine was being used for the composition scheme. So,
I was not claiming its ITC earlier.
Many months passed.
Not months, many years passed.
I am not claiming its ITC because
I can't claim it because I am a composition dealer.
But overnight, I left the composition scheme and came to
the normal scheme.
As soon as I come to the normal scheme, will the machine
which will produce goods be sold normally? Will I sell
goods and charge GST?
Can I take the ITC of that machine now? The answer is yes.
But I will get a proportionate
ITC. How will I get a proportionate ITC? Whatever was your
input in capital goods, from that input, minus 5% per
quarter from date of invoice.
For example, you have come to the normal scheme since 1st
July.
Now, suppose you had bought a machine on 1st January. If
you had bought a machine on 1st January, then calculate the
quarter.
1st January to 1st March, then 1st April to 1st May, then
2nd April to 1st June.
So, your tax was of Rs.
1 lakh on the machine.
The machine was of Rs.
10 lakh and GST was of Rs.
1 lakh.
From that, minus 5% per quarter.
That means, 5% number of quarters are 2.
I will minus that.
I will minus 10% from that.
So, how much? I can take the ITC of Rs.
90,000 now. I can take the ITC of Rs.
10,000 now.
I will have to leave the ITC of Rs.
10,000. However,
I had brought the machine with a tax of Rs.
1 lakh.
I had brought the machine with a tax of Rs.
1 lakh.
Look at this.
I had brought the machine with a tax of Rs.
1 lakh.
But, it can be assumed that I have used the machine worth
Rs.
10,000 for the composition scheme.
The remaining Rs.
90,000 will be used for normal purposes.
So, I will take the ITC in the normal scheme of Rs.
90,000. You leave the composition scheme and come to the
normal scheme.
There is no problem.
Whatever semi-finished goods you have, finished goods, raw
material, whatever you have a day before conversion, tell
me the list and you will get the ITC.
Yes, keep in mind that the capital goods will be reduced by
5% for every quarter.
Because you have used that machine earlier in the
composition scheme.
So, according to how much you have used, reduce it by 5%.
You will get the rest of the ITC in your hands. Utilize it
as you wish.
But, keep in mind, there is one more condition.
Within a year, whatever your ITC is, one year from the date
of invoice, you can claim your ITC.
The Rs.
90,000 and the goods and services you were taking in that
case, check the invoice date.
I had told you that you bought the goods on 25th June.
So, on 25th June, like you bought the goods on 25th June,
2022, so next year, 24th June, 2023, you can claim the ITC
within a year.
After that, you cannot claim the ITC.
This is the point.
Check it out.
Is there any problem in this? You are going from
composition to normal.
Okay, earlier you were not taking the ITC, now you will get
the ITC.
One day before the conversion, you will get the ITC of the
goods.
There are exam supplies.
Now, you were making exam supplies.
To make exam supplies, some goods and services must be
required.
Now, you were making exam supplies, overnight those exam
supplies became taxable supplies.
Okay, no problem.
First, tell me one thing.
Confirm this thing.
When I am making exam supplies, at that time, will I ever
sell exam supplies? I am making exam supplies, so I will
sell exam supplies.
And when I am selling exam supplies, can I collect GST on
that? Is it exam supply? Can I collect GST? Answer is no.
When I cannot collect GST, can I take the ITC? Answer is no.
But now, I am lucky.
Someone told me to go to Vaishnodevi's temple.
If you want to claim ITC, I said, I will purchase it and
bring it.
And my final exam is there.
How can I take ITC? Someone said, son, go to Vaishnodevi's
temple.
There is a lot of respect for that temple.
I am not joking.
There is a lot of respect for that temple.
Whatever I am today, I am because of that temple.
I am because of Vaishnodevi.
Say, Jai Mata Ki.
Someone said, go there.
Maybe some miracle will happen.
Sir, exam supply.
The man who was there, he came after darshan.
He bowed his head for darshan of Devi.
As soon as he came down after darshan, as soon as he came
down from the hill, he opened his mobile.
There was a notification from the government that your exam
supply has become taxable supply.
Sir, as soon as his exam supply became taxable supply, now
tell me, when I am selling taxable supply, can I collect
GST from the customer? Answer is yes.
And when I can collect GST, can I take its ITC?
Answer is yes.
When I can take ITC, which date should I get ITC from?
Which date should I get it from, tell me?
I must have bought the stuff.
If I am selling here, if I am selling stuff here, and the
notification for 1st July 2022 is that your exam supplies
will now become taxable supplies.
So, for example, till here, till here, all the stuff I have
bought,
I have sold it for the exam, I cannot take ITC for that.
But what I have one day before, what stock I have on 30th
June, whatever stock I have on 30th June, what will it go
for now?
It will go for taxable supplies, that stock.
Should I legally get ITC for that stock?
Answer is yes.
So, whatever stock you have one day before, that
notification has come, from the date on which your goods
become taxable, that notification has come, whatever stock
you had one day before, you can legally get ITC for that
stock.
No one's father can take care of you.
This is my era.
I had exam supply, I didn't take it till then.
It became taxable supply.
Okay, I am taking ITC.
What is the problem?
Is there any problem?
Okay, sir.
There was no liability for registration earlier.
Turnover was less, from 20 lakhs to 40 lakhs, there was a
turnover below.
This is the third case I am telling you.
Now, turnover exceeds 20 lakhs.
In GST, I have to take registration mandatorily.
Okay, sir.
No problem.
Look at this.
Same case.
On 1st July, 2022,
I take registration here.
As soon as I take registration here, what should I do with
the stock before that?
I can take ITC for that.
Earlier, I didn't take ITC.
Because when I was not registered in GST,
I couldn't cut the invoice.
I couldn't cut the GST invoice.
When I couldn't cut the GST invoice, I couldn't collect any
tax from the front.
And when I can't collect any tax on output supplies, then
how could I take
ITC for input supplies?
Till now, this was going on.
Sir, my turnover exceeds.
On 1st July, I take registration.
Or my liability came on that day that I have to take
registration.
Okay, sir.
Whatever stock you have on 30th June, whatever raw material
you have, finished goods, stock you have, okay, you can
take ITC for that.
You can take ITC.
Okay, point?
Is it voluntary registration?
It is exactly the same point.
From the date you apply voluntarily for registration, you
can claim ITC for whatever stock you have a day before.
There is nothing to argue in this.
Logically, if you understand, these are the cases where
earlier you didn't have any liability. You couldn't take
ITC.
You couldn't take ITC.
And you didn't have any liability for collecting output tax.
You wouldn't have collected output tax and wouldn't have
taken ITC.
But what happened now?
What is happening? There were such circumstances at night.
Turnover exceeded.
Notification came that now your supplies are taxable.
Normal scheme of GST, you have come in that.
You will get tax on your supplies.
You will cut invoices.
You will collect GST.
And as soon as you collect GST, you can take ITC for old
supplies that you had a day before.
This was a simple point.
I hope the point is clear.
Let's read it quickly and then end it.
What does it say?
Person who has applied for registration within 30 days from
the date is liable to registration.
Who will get ITC?
Inputs contained in stock.
Inputs contained in semi-finished goods, finished goods,
etc. The day immediately preceding the day from which he
becomes liable.
You can take ITC within a year from the date of issue of
invoice by the supplier.
Second point.
Person who is not required to register but voluntarily took
registration.
Inputs held in stock.
Inputs contained in semi-finished goods.
Inputs held in stock.
Inputs contained in semi-finished goods.
Inputs held in stock.
Whoever has a stock, in the day preceding the registration,
I can take it.
Registered person who seizes to pay composition tax and
switches to regular.
I'm coming to regular.
Capital goods are also there.
Whichever I had a day before,
I will take ITC.
ITC on capital goods will be reduced by 5% per quarter or
part of the year from the date
4. Registered person who has taxable exam supply
5. Inputs held in stock and inputs contained in
semi-finished finished goods
6. Electronic declaration on common portal
7. Electronic declaration on inputs held in stock and
inputs contained in semi-finished goods
ITC on capital goods will be reduced by 5% per quarter or
part of the year from the date