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One of our valuable clients has raised the following queries related to excess VAT payment, ITC on education cess, etc  which have been answered as below:-

Q.1. If  a supplier show the supplies under B2C in his GSTR-1  in this case will we get the input tax credit?

A.1. A supplier who is registered under GST, is eligible for input tax credit for the tax paid on all his purchases and other expenses. So even if the transaction is B2C or B2B , the supplier can claim input tax credit subject to the following conditions:

a. The supplier should have tax invoice(of purchase) or debit note issued by registered dealer

b. The supplier should have received the goods/services.

c. The tax charged on the supplier’s purchases has been deposited/paid to the government by the supplier in cash or via claiming input credit.

d. The registered dealer from whom the supplier has received the purchases has filed GST returns.


Q.2. Can we get input tax credit of Education cess and KKC in GST?

A.2. Transitional provisions under the CGST Act allow carryover of only the Cenvat Credit and Credit of eligible duties mentioned in the explanations given at the end of section 140. Education Cess & Secondary and Higher Education Cess are not mentioned there. Therefore these will not be carried forward as credit of these cesses is not allowed under GST. Swatch Bharat Cess(SBC) and Krishi Kalyan Cess will not be eligible for carry forward to GST regime as credit of these cesses is not allowed under GST. The cesses will also not be leviable under GST to the extent they are levied as duties of excise (except on excluded items) or Service Tax or as a surcharge.


Q.3.  Can we get credit of Excess VAT payment in June qtr-2017 because earlier WBVAT law there is no option for carry forward the Excess payment only we can get refund?

A.3. Input tax credit as per present system of indirect taxes will be carried forward directly under GST in the GST electronic ledger. CENVAT credit will appear as CGST & VAT Credit as SGST.

This can be explained by way of an example:

ABC Ltd has its VAT Form 100 shows credit/excess amount carried forward (as on 30th June, 2017) to be Rs 10,000. Thus, ABC Pvt Ltd’s input VAT credit balance stands at Rs 10,000. This credit can be carried forward provided ABC Ltd fulfils certain conditions. First the input VAT of Rs 10,000 must be shown in the returns and secondly GST approves of the same as input tax credit. If the above are satisfied, the input VAT will be carried forward as SGST credit.

So as per our views, excess VAT payment (VAT credit) will be carried forward as SGST.

Disclaimer - The information provided in this document is for general information only. It is based on the information available publicly and the advice received from various professional experts regarding the GST law. The user of this document should be aware that the interpretation or implications of relevant GST rules may change/vary depending upon circumstances applicable to the user.

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