GST, as in Goods and Services Tax is going to be one of the biggest reforms in India. GST registration in India is an Indirect Tax that is collected by the Indian Govt and paid by the dealers on the SUPPLY of goods and services. It levies on a manufacturer, seller, and consumption of goods and services at the time of the SUPPLY.
It will basically replace all the other taxes that are collected by the Central and State Govt. The Central Govt collects CENTRAL GOODS AND SERVICES TAX that is, CGST on the distribution or supply of goods and services. The State Govt collects SGST, that is STATE GOODS AND SERVICES TAX on the supply or distribution of goods and services. Whereas the Inter- State Govt collects IGST, that INTERSTATE GOOD AND SERVICES TAX on the supply or distribution of goods and services!
See, the dealer here? He PAYS the Goods and Services Tax to the govt at the time of the supply of the goods and services. The liability on such tax payments arises when the RECEIPT OF ADVANCE PAYMENT is received by the dealer.
Receipt of goods and services is a must for making sure Input Tax Credits under the GST and therefore, Credit will only be available on the ‘ADVANCE RECEIPT’ of goods and services.
WHAT ARE INPUT TAX CREDITS?
When the dealer/ Manufacturer receives Credit for paying input taxes towards inputs used in the making(manufacturing) of the product, it is called Input Tax Credits!
Now, do you know the Requirements for ITC REFUNDS under GST?
See, before applying for the refunds of ITC under GST, there are some points you must consider! These are given below as ‘Have to HAVES!’ Look :
• You have to HAVE the RECEIPT OF GOODS AND SERVICES before applying for the refund of ITC. For a refund claim to go all the way in and settle, you must have a receipt for payment of GST that will prove that you have literally paid the GST!
• Know about the GST RETURN FURNISHINGS? You must have filed returns with the GST authorities if you’re a dealer! Those are called GST RETURN FURNISHINGS. You have to HAVE a copy of file returns! Send that copy to the GST authorities while applying for the refund of ITC.
• Don’t forget about the GST TAX INVOICE! You have to HAVE the GST Tax Invoice to prove that you have, in fact as a dealer, paid the Tax! Also, it is mandatory for the major authorities in India so they would be able to take all the steps needed to ITC Refund.
Note: In case you don’t know exactly when you’ll need to claim a refund, let us tell you that the need arises when you’re out of return furnishing for any tax period.
For more information contact LegalRaasta. And thanks for reading