Practical FAQs on Input Tax Credit

1 Practical FAQs on Input Tax Credit GST & Indirect Taxes Committee The Institute of Chartered Accountants of India (Set up by an Act of Parliament) New Delhi The Institute of Chartered Accountants of India All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form, or by any means, electronic, mechanical, photocopying, recording, or otherwise without prior permission, in writing, from the publisher. DISCLAIMER: The views expressed in this book are of the author(s).

2 The Institute of Chartered Accountants of India may not necessarily subscribe to the views expressed by the author(s). The information contained in this book has been drawn primarily from the CBIC website - and other sources. While every effort has been made to keep the information in this book error free, the Institute or any office of the same does not take the responsibility for any typographical or clerical error which may have crept in while compiling the information. First Edition : July, 2021 Committee/Department : GST & Indirect Taxes Committee E-mail : Website : ; Price : ` 250/- ISBN : 978-93-90668-66-3 Published by : The Publication Department on behalf of the Institute of Chartered Accountants of India, ICAI Bhawan, Post Box No.

3 7100, Indraprastha Marg, New Delhi - 110 002. Typeset by : Elite-Art, New Delhi-110 002 Printed by : Sahitya Bhawan Publications, Hospital Road, Agra - 282 003. Foreword It has been four years since the introduction of GST in India and the journey so far has been eventful and fast paced. With innumerable notifications, circulars, orders, instructions, FAQs etc. issued during the last four years coupled with annual Finance Acts, GST has been keeping all the stakeholders fully occupied.

4 While the Government has been diligently making amendments to address the issues, tax professionals have been engaged in meticulously analysing such amendments and the impact thereof on their client s businesses and the taxpayers have been on their toes in implementing such changes in their business processes and ensuring compliances. GST is one of the most prodigious tax reforms the country has witnessed since independence. The reform of such a magnitude cannot be without its share of bottlenecks and initial setbacks.

5 However, the Government has been very receptive and quick in addressing the various challenges faced by the industry and public concerns by amending the law or issuing necessary clarifications as and when required. GST, along with its challenges, has also brought in various benefits like integration of State economies and creation of one national market and mitigation of the cascading effect of taxes by allowing seamless Credit of Input tax across goods and services. The Institute of Chartered Accountants of India (ICAI), through its GST & Indirect Taxes Committee, has rendered unflinching support to the Government in ushering in the GST regime in India and continues to provide its unabated assistance in ironing out the post-implementation issues as well.

6 Further, the ICAI has also been playing a crucial role in GST knowledge dissemination amongst all the stakeholders through its technical publications, GST Newsletter, live webcasts, e-learning, certificate courses, conferences and programmes. I am happy to note that the GST & Indirect Taxes Committee of ICAI has come out with a useful publication titled, Practical FAQs on Input Tax Credit . I congratulate CA. Rajendra Kumar P, Chairman, CA. Sushil Kumar Goyal, Vice-Chairman, and other members of GST & Indirect Taxes Committee for this initiative as this publication is a compilation of Practical queries of stakeholders on the core concept of GST viz.

7 , Input tax Credit . The answers to such queries are drafted by erudite subject experts. I am sure this publication will be of immense use to the members of ICAI and will also prove to be a handy guide for all the stakeholders. Place: New Delhi Date: 30th June, 2021 CA. Nihar N Jambusaria President, ICAI MEMBERS OF THE GST & INDIRECT TAXES COMMITTEE Members from the Sitting Council CA. Rajendra Kumar P, Chairman CA. Pramod Kumar Boob CA. Sushil Kumar Goyal, Vice-Chairman CA. Manu Agrawal CA. Nihar N Jambusaria, President (Ex-Officio) CA.

8 Anuj Goyal CA. (Dr.) Debashis Mitra, Vice-President (Ex-Officio) CA. Prakash Sharma CA. Atul Kumar Gupta, Past President CA. Kemisha Soni CA. Anil S Bhandari CA. Satish Kumar Gupta CA. Jay Chhaira CA. Hans Raj Chugh CA. Nandkishore C Hegde CA. Tarun J Ghia CA. Chandrashekhar V Chitale CA. Pramod Jain CA. Aniket S Talati CA. Charanjot Singh Nanda CA. Dayaniwas Sharma Shri Manoj Pandey CA. G Sekar Adv. Vijay Kumar Jhalani CA. M P Vijay Kumar Shri Sunil Kanoria CA. Ranjeet Kumar Agarwal Co-opted Members CA. Upendra Gupta, IRS CA.

9 Abhay Desai CA. Rajeesh Gupta CA. Arvind Bhansali CA. Ravichandran V A CA. Niraj Harodia CA Mahesh Madkholkar CA. Prasun Kumar Bhattacharyya CA. Raman Kumar Gupta EXPERTS WHO HAVE CONTRIBUTED TOWARDS THE DEVELOPMENT OF THIS PUBLICATION Name S. No. Name 1. CA. Aanchal Kapoor 18. CA. Hitesh Jain 2. CA. Abhishek Agarwal 19. CA. J Balasubramanian 3. CA. Aditya Dhanuka 20. CA. J. Murali 4. CA. Aditya Girdharilal Falor 21. CA. N K Bharath Kumar 5. CA. Ajaykumar Narayan Parnaik 22. CA. Neha Jain D 6. CA. Amey Makarand Dabke 23.

10 CA. P. Sankaran 7. CA. Amish J Khandhar 24. CA. P. Harini Sridharan 8. CA. Anand Ratanlalji Nahar 25. CA. Purushothaman J 9. CA. Ankit Kanodia 26. CA. S. Seetharaman 10. CA. Arjun Shridhar Phatak 27. CA. Sampath Kumar V V 11. CA. Ashu Dalmia 28. CA. Saradha H 12. CA. Bikash Agarwala 29. CA. Saurabh Singhal 13. CA. (Dr.) Dilip V. Satbhai 30. CA. Shaikh Abdul Samad Ahmad 14. CA. G Saravanakumar 31. CA. Shankara Narayanan V 15. CA. Ganesh Prabhu B 32. CA. Shubham Khaitan 16. CA. (Dr.) Gaurav Gupta 33.