Latest Articles By Madan Murari

The Role of ITC in Reducing Tax Burden for MSMEs The Input Tax Credit (ITC) enables MSMEs to minimize their taxation by claiming credit for taxes paid on purchases. It helps them balance their tax liabilities, increase their cashflows, bring down costs, comply with GST norms, and make their operations more efficient and competitive in

How Input Tax Credit Benefits Different Sectors: A Sector-wise Analysis Input tax credit is a crucial mechanism that allows businesses to claim a credit for the taxes paid on their inputs (goods and services). To better understand this, it’s essential to explore what input tax credit is in GST.Businesses can greatly reduce their overall tax

Common Challenges in GST Reconciliation and How to Overcome Them GST reconciliation compares GST data a taxpayer submits in their GST returns with the information available on the government’s portal. The business’s accounting records match sales and purchase data from various GST return forms such as GSTR1, GSTR2B, and more. Any errors, omissions, or mismatches

Comparison of GSTR 3B vs GSTR 2A : Importance & Report BOOK A FREE DEMO GSTR 3B vs GSTR 2A GSTR 3B and GSTR 2A are different forms for filing GST returns, requiring different reconciliation methods. Taxpayers use Form GSTR 3B to declare their GST liabilities. The due date for filing GSTR 3B, a monthly

How to Cancel GST Registration Every business owner must stay aware of the process for cancelling their GST registration in case they need to discontinue their operations or for any other reason. The Goods and Services Tax (GST) system was introduced in India in 2017, and GST registration is mandatory for businesses with an annual

Cancelling GST Registration for a Sole Proprietor after Death As a business owner in India, it is crucial to understand the legal and regulatory requirements for Goods and Services Tax (GST) registration. GST registration is mandatory for businesses with an annual turnover above a certain threshold, and failure to comply with registration requirements can result

Vendor Reconciliation – Meaning, Format, Process Across businesses, vendor payments represent a major cash outflow. Accountants usually manage vendor reconciliation to run the business conveniently. Even though it could be laborious and time-consuming, this work provides a firm with important advantages and is occasionally disregarded. Vendor reconciliations must be used correctly to guarantee the best

Who Can Claim ITC in India Input Tax Credit is one of the significant features of GST. It is applied to every transaction conducted under GST. Understanding how to claim an input tax credit, when to claim one, what cannot be claimed, etc., is crucial for a registered person. Incorrect input tax credit claims may

ITC 01 Form – Claim ITC on New GST Registration Form GST-01 is used to claim Input tax credit by taxpayers that have newly registered under GST. Newly registered persons need to declare any existing stock of inputs, capital goods and/or finished goods at their place of business as on the day they obtained their

Optimising Credits In The Amended Rules For Input Tax Credit Utilisation To optimise the utilisation of input tax credit under the new rules, it is essential to claim all input tax credits as soon as possible. Late claims may be ineligible for credit. Businesses can apply for a refund of any excess input tax credit

What is O2A form under GST GST ITC-02A form is used by registered taxpayers who own businesses at multiple locations within a state or union territory to transfer their input tax credit (ITC) from the registered entity to a new one. This article provides a comprehensive understanding of the provisions related to the GST ITC-02A

Matching, Reversal and Reclaim of ITC Input tax credit (ITC) is the credit a registered taxpayer can claim for the tax paid on the purchases made for business purposes. Matching, reversal, and reclaiming of input tax credit refer to the process of reconciling the ITC claimed by the taxpayer with the tax liability payable to

Reversal of Input Tax Credit In GSTR-2 The tax that a person already paid at the time of the purchase of goods or services and which is eligible as a deduction from the tax due is referred to as an input tax credit. The reversal of input tax credit refers to the situation where a

Inverted Duty Structure Under GST When the input tax credit available on inputs is greater than the GST rate applied to the final product, it leads to an inverted duty structure. This raises the manufacturer’s tax burden, as he is buying inputs at a higher tax rate than what he is charging customers for the

Monthly Tax and ITC Summary Report The Monthly Tax and ITC Summary Report may be used to analyse and maintain track of the output taxes paid and the input tax credit used within any given period. When completing yearly returns, the taxpayer must provide a detailed accounting of all taxes paid and input tax credits

Section 43A – Procedure For Furnishing Returns & Availing Input Tax Credit The GST filing system has undergone multiple changes since its implementation. This change is meant to implement a new and efficient return filing structure under the CGST Rules, as recommended by the GST Council at its 27th meeting. Section 43A has been added

How To Claim ITC Under The New GST Return Filing System? GST returns are statements companies must submit to the government to record their taxable sales and purchases. On the other hand, the Input Tax Credit (ITC) is a credit that a business can claim on the GST paid on inputs and use to reduce

Adjustment of Input Tax Credit under GST BOOK A FREE DEMO Why is it necessary to reconcile the returns with the book of accounts? Prevent missing out on claiming ITC Sometimes, businesses forget to document the invoices they receive. Reconciliation helps in ensuring that the available ITC is claimed correctly and on time. Maintaining Internal

How To File ITC-02 on The GST Portal? As GST taxpayers, it is important to stay compliant with the various rules and regulations set by the government. One such compliance requirement is filing ITC-02 forms on the GST portal. ITC is claimed by filing several forms on the GST portal, one of which is ITC-02.

All About Rule 86B Under GST: Restriction on ITC Utilisation In Electronic Credit Ledger BOOK A FREE DEMO Exceptions to the Rule Rule 86B allows certain exceptions, as mentioned below: If the individuals listed below paid more than Rs. 1 lakh in income tax pursuant to the Income Tax Act, 1961 The registered person Proprietor,

How to Claim Maximum ITC: Time Limits and Tips As a business owner, it’s important to stay up-to-date on tax laws and credits that can help you save money and reduce your tax burden. One tax credit that may be available to you is the Input Tax Credit (ITC). This credit allows businesses to offset

What Expenses Can Be Claimed as Input Tax Credit ITC? This article explains which expenses businesses can claim as Input Tax Credits and how to calculate and claim them. For small business owners, understanding the ins and outs of ITC will help save a significant amount of money. GST software can help you readily claim

Availing ITC As Per Section 16 (2) (Aa) In India, the Input Tax Credit (ITC) is a crucial element of the Goods and Services Tax (GST) system. As per Section 16 (2) of CGST Act, 2017, Businesses must submit claims for Input Tax Credit (ITC) that only shows in GSTR-2B starting January 1st, 2022. This

Rules For Input Service Distributor Under GST Laws One of the provisions of GST is the concept of an Input Service Distributor (ISD). ISD is a mechanism that allows taxpayers with multiple branches to distribute the input tax credit on the input services received by the head office or central administration to the respective branches.

What is Reversal of Input Tax Credit The tax that a person already paid at the time of the purchase of goods or services and which is eligible as a deduction from the tax due is referred to as an input tax credit. The reversal of input tax credit refers to the situation where a

What is GST Reconciliation? Every data point in the records of a business is closely tracked by the GST authorities. Any discrepancy can lead to unnecessary scrutiny, audits, or even suspension of GST registration by the authorities, which can be highly cumbersome for a business. Thus, proper reconciliation of GST is an absolute must. Reconciliation

What Are Special Cases Where ITC is Not Applicable? Input Tax Credit is a key differentiator of GST from previous tax regimes. For taxes paid on purchasing business-related supplies, taxpayers can claim Input Tax Credit to lower their tax obligations on their sales. However, GST law mentions several cases where taxpayers are not allowed to

How to Claim ITC in India In order to claim ITC, a business owner must pay the supplier for the received supplies, including tax, within 180 days from the invoice’s issuance. If the purchaser fails to do so, the credit amount they could have availed will be included in their output tax liability. Once the

What is Input Tax Credit on Common Credit Businesses often purchase goods for business as well as personal use. However, Input Tax Credit is only allowed on goods used for business purposes. This is where the concept of common credit comes into the picture. In this article, we will provide a thorough explanation of common

Input Tax Credit on Job Work Under GST Input Tax Credit (ITC) on job work in GST is an essential aspect of the Goods and Services Tax (GST) system that allows businesses to claim tax credit for inputs used in the manufacturing of goods or providing services. In the GST system, businesses can claim ITC

Claiming ITC on Transfer of Business A registered taxpayer may transfer the input tax credit accessible and excess in his electronic credit ledger to another business in case of a business transfer by way of sale, merger, or demerger by filing a declaration in GST Form ITC-02. The new business entity must register for Goods

Complete Guide to Input Tax Credit under GST As a business owner and taxpayer, you need to understand Input Tax Credit to be able to maximise your tax benefits and reduce unnecessary tax liabilities. Input Tax Credit allows businesses to claim a credit for taxes they have paid on the purchase of goods and services

Transition of The Old Input Credits under VAT to GST – Tran 2 BOOK A FREE DEMO Form Tran 2 can be filed by a dealer/trader registered under GST but not under the old regime. A dealer who doesn’t have VAT or excise invoices for stocks they hold can use TRAN 2 to claim credit

Transition of The Old Input Credits under VAT to GST – TRAN 1 BOOK A FREE DEMO Making sure their registered firms under GST do not miss out on the tax advantages and input credits of the previous system is a top priority. These taxes may have been paid when purchasing inputs, raw materials, semi-finished

ITC Reporting In GSTR-9: GSTR-2A Reconciliation, Challenges, And Clarifications BOOK A FREE DEMO Under GST, taxpayers must file annual returns in the form of GSTR-9, which provides a summary of all the transactions undertaken during the financial year. One of the main aspects of GSTR-9 is to reconcile the ITC claimed in GSTR-3B with the

ITC 01 Form – Claim ITC on New GST Registration BOOK A FREE DEMO Regular businesses would have inputs, capital goods, and finished products stocked at their location on the day they registered for GST. Before acquiring GST registration, the buyer cannot claim the GST paid on such purchases as an Input Tax Credit (ITC).

Amendments in GSTR-1 and Error Messages It’s usual to make mistakes while submitting your GST return. However, since the ability to make modifications and adjustments in the GST forms is restricted, it is essential to have a solid understanding of the errors that may be rectified, as well as the procedure for doing so and

Optimising Credits In Amended Rules or Input Tax Credit Utilisation The most effective way to optimise input tax credit utilisation under the amended rules is to ensure that all input tax credits are claimed as soon as possible, as late claims may not be eligible for credit. Additionally, businesses should apply for a refund of

What is the Input Tax Credit under GST in India? Input Tax Credit is one of the most significant features of GST. It applies to every transaction conducted under GST. Understanding how to claim an input tax credit, when to claim one, what cannot be claimed, etc., is crucial for a GST registered Individual. Incorrect