THE GOODS AND SERVICES TAX (Input Tax Credit) RULES, 2017

Rule No. Rule title Form No. Time Limit Section Reference Draft Provision Final Provision Author's Analysis
1 (1) Documentary requirements and conditions Section 31, 34 (1) The input tax credit shall be availed by a (1) The input tax credit shall be availed by a This sub-rule prescribes the documents on
for claiming input tax credit registered person, including the Input registered person, including the Input the basis of which the input tax credit can be
Service Distributor, on the basis of any of the Service Distributor, on the basis of any of the availed.
following documents, namely:- following documents, namely:-

a) an invoice issued by the supplier of a) an invoice issued by the supplier of

goods or services or both in accordance with goods or services or both in accordance with
the provisions of section 31; the provisions of section 31;

b) a debit note issued by a supplier in b) an invoice issued in accordance with the

accordance with the provisions of section provisions of clause (f) of sub-section (3) of
34; section 31;
c)a bill of entry; c) a debit note issued by a supplier in Realignment of sub rules. New document
accordance with the provisions of section added as presecribed under Customs Act,
34; 1962 or rules therof for availing IGST credit
on Imports

d) an invoice issued in accordance with the d) a bill of entry;or any similar document
provisions of clause (f) of sub-section (3) of prescribed under the Customs Act, 1962 or
section 31; rules made thereunder for assessment of
integrated tax on imports;

e) a document issued by an Input Service e) an ISD invoice or ISD credit note or any
Distributor in accordance with the provisions document issued by an Input Service
of sub-rule (1) of rule invoice.7; Distributor in accordance with the provisions
of sub-rule (1) of rule invoice.7.

f) a document issued by an Input Service

Distributor, as prescribed in clause (g) of sub-
rule (1) of rule 4.
1 (2) Documentary requirements and conditions GSTR-2 (2) Input tax credit shall be availed by a (2) Input tax credit shall be availed by a Invoice rules prescribes the details to be
for claiming input tax credit registered person only if all the applicable registered person only if all the applicable mentioned on the invoice like,
particulars as prescribed in Chapter ---- particulars as prescribed in Chapter ----
(Invoice Rules) are contained in the said (Invoice Rules) are contained in the said
document, and the relevant information, as document, and the relevant information, as
contained in the said document, is furnished contained in the said document, is furnished
in FORM GSTR-2 by such person. in FORM GSTR-2 by such person.

a)Name of the Supplier
b)GSTN
c)Specific Invoice Number format
 THE GOODS AND SERVICES TAX (Input Tax Credit) RULES, 2017

Rule No. Rule title Form No. Time Limit Section Reference Draft Provision Final Provision Author's Analysis
d)Name & address of recipient
e)Address of Delivery
f) HSN Code for goods or accounting code
for services
g) Description and quantity of the goods /
services.
h)Value of the goods
i)Rate & amount of tax
j)Other prescribed information.

Such conditions can create considerable
amount of litigations as supplier may or may
not give all the information required under
the Invoice Rules. Currently there are
provisions under Cenvat Credit Rules, 2004
to accept clerical errors on the invoices.

1 (3) Documentary requirements and conditions (3) No input tax credit shall be availed by a (3) No input tax credit shall be availed by a No input tax credit of tax paid on account of
for claiming input tax credit registered person in respect of any tax that registered person in respect of any tax that fraud, willful misstatement or suppression of
has been paid in pursuance of any order has been paid in pursuance of any order facts will be allowed.
where any demand has been raised on where any demand has been raised on
account of any fraud, willful misstatement or account of any fraud, willful misstatement or
suppression of facts. suppression of facts.
 THE GOODS AND SERVICES TAX (Input Tax Credit) RULES, 2017
Rule No. Rule title Form No. Time Limit Section Reference Draft Provision
2 (1) Reversal of input tax credit in case of non- GSTR-2 The month Section 16 (2) A registered person, who has availed of
payment of consideration immediatel input tax credit on any inward supply of
y following goods or services or both, but fails to pay to
the period the supplier thereof the value of such supply
of one along with the tax payable thereon within
hundred the time limit specified in the second proviso
and eighty to sub-section (2) of section 16, shall furnish
days the details of such supply and the amount of
input tax credit availed of in FORM GSTR-2
for the month immediately following the
period of one hundred and eighty days from
the date of issue of invoice.
2 (2) Reversal of input tax credit in case of non- (2) The amount of input tax credit referred
payment of consideration to in sub-rule (1) shall be added to the
output tax liability of the registered person
for the month in which the details are
furnished.
2 (3) Reversal of input tax credit in case of non- Section 50(1) (3) The registered person shall be liable to
payment of consideration pay interest at the rate notified under sub-
section (1) of section 50 for the period
starting from the date of availing credit on
such supplies till the date when the amount
added to the output tax liability, as
mentioned in sub-rule (2), is paid.
Final Provision
(1) A registered person, who has availed of
input tax credit on any inward supply of
goods or services or both, but fails to pay to
the supplier thereof the value of such supply
along with the tax payable thereon within
the time limit specified in the second proviso
to
sub-section (2) of section 16, shall furnish
the details of such supply, the amount of
value not paid and the amount of input tax
credit availed of proportionate to such
amount not paid to the supplier in FORM
GSTR-2 for the month immediately following
the period of one hundred and eighty days
from the date of issue of invoice.
Provided that the value of supplies made
without consideration as specified in
Schedule I shall be deemed to have been
paid for the purposes of the second proviso
to sub-section (2) of section 16.
(2) The amount of input tax credit referred
to in sub-rule (1) shall be added to the
output tax liability of the registered person
for the month in which the details are
furnished.
(3) The registered person shall be liable to
pay interest at the rate notified under sub-
section (1) of section 50 for the period
starting from the date of availing credit on
such supplies till the date when the amount
added to the output tax liability, as
mentioned in sub-rule (2), is paid.
(4) The time limit specified in sub-section (4)
of section 16 shall not apply to a claim for
reavailing of any credit, in accordance with
the provisions of the Act or these rules, that
had been reversed earlier.
Author's Analysis
In case of non-payment of value of the
goods & tax thereon to the supplier towards
goods / services within period 180 from the
date of invoice, then credit taken on such
invoice needs to be reported in the return of
the month immediately following the period
of 180 days.
Proportionate credit is allowed for amount
paid to supplier and for remaining amount of
which credit is not allowed to be reported in
Form GSTR-2.
Payment condition is not required in case of
FOC suppllies
The amount of reversal will be added in the
output tax liability of the assessee.
In addition to output liability, interest from
the date of availment of credit till date of
addition in the output tax liability.
The condition of not allowing credit after
filing of Annaul return will not be appicable
for reavaling input tax credit which was
reversed earlier.
 THE GOODS AND SERVICES TAX (Input Tax Credit) RULES, 2017

Rule No. Rule title Form No. Time Limit Section Reference Draft Provision
3 Claim of credit by a banking company or a GSTR-2 Section 17 (4) A banking company or a financial institution,
financial institution including a non-banking financial company,
engaged in supply of services by way of
accepting deposits or extending loans or
advances that chooses not to comply with
the provisions of sub-section (2) of section
17, in accordance with the option permitted
under sub-section (4) of that section, shall
followtheprocedurespecifiedbelow
Final Provision
A banking company or a financial institution,
including a non-banking financial company,
engaged in supply of services by way of
accepting deposits or extending loans or
advances that chooses not to comply with
the provisions of sub-section (2) of section
17, in accordance with the option permitted
under sub-section (4) of that section, shall
followtheprocedurespecifiedbelow
Author's Analysis
Banking & financial institution has option to
avail 50% of the input tax credit. This rule
specified the methodology of availment of
the said 50% credit. The methodology is
summarised below,

a) the said company or institution shall not
avail the credit of tax paid on inputs and
input services that are used for non-business
purposes and the credit attributable to
supplies specified in sub-section (5) of
section 17, in FORM GSTR-2;
b) the said company or institution shall
avail the credit of tax paid on inputs and
input services referred to in the second
proviso to sub-section (4) of section 16 and
not covered under clause (a);
(a) the said company or institution shall not a) Identify the total tax on purchase of
avail the credit of,- goods & services
(i) tax paid on inputs and input services that
are used for non-business
purposes, and
(ii) the credit attributable to supplies
specified in sub-section (5) of section 17, in
FORM GSTR-2;
b) the said company or institution shall b)Reduce the total tax credit by following
avail the credit of tax paid on inputs and Section reference corrected
input services referred to in the second
proviso to sub-section (4) of section 17 and
not covered under clause (a);

c) fifty per cent. of the remaining input tax c) fifty per cent. of the remaining input tax Ineligible credit as per Section 17 (5)
shall be the input tax credit admissible to the shall be the input tax credit admissible to the
company or the institution and shall be company or the institution and shall be
furnished in FORM GSTR-2; furnished in FORM GSTR-2;

d) (d) the amount referred to in clauses (b)

4 Procedure for distribution of credit by Input GSTR-6
Service Distributor
d) (d) the amount referred to in clauses (b) Credit pertaining to invoices for which
and (c) shall, subject to the provisions of and (c) shall, subject to the provisions of the payment has not been made within 180
sections 41, 42 and 43, be credited to the sections 41, 42 and 43, be credited to the days.
electronic credit ledger of the said company electronic credit ledger of the said company
or the institution. or the institution.
c) 50% of balance credit will eligible to
Banking & Financial Institute
Every (1) An Input Service Distributor shall (1) An Input Service Distributor shall ISD will be required to distribute the tax paid
month distribute input tax credit in the manner and distribute input tax credit in the manner and on the input services in same month to
subject to the conditions specified below- subject to the conditions specified below- which it pertains.
 THE GOODS AND SERVICES TAX (Input Tax Credit) RULES, 2017

Rule No. Rule title Form No. Time Limit Section Reference Draft Provision Final Provision Author's Analysis
a) the input tax credit available for a) the input tax credit available for
distribution in a month shall be distributed distribution in a month shall be distributed
in the same month and the details thereof in the same month and the details thereof
shall be furnished in FORM GSTR-6 in shall be furnished in FORM GSTR-6 in
accordance with the provisions of Chapter --- accordance with the provisions of Chapter ---
- (Return Rules); - (Return Rules);

In case the any service provider has reported

the supply of services in their GSTR-1 and
the ISD has not received the invoice, then it
is important to delete those invoices from
the GSTR-2 of the ISD.

(b) the Input Service Distributor shall, in (b) the Input Service Distributor shall, in Separate distribution of ineligible credit also
accordance with the provisions of clause (d), accordance with the provisions of clause (d), required to be done by ISD. By this
separately distribute the amount in-eligible separately distribute the amount in-eligible mechanism even ineligible credit will be
as input tax credit under the provisions of as input tax credit under the provisions of transferred to the State to which it pertains.
sub-section (5) of section 17 and the amount sub-section (5) of section 17 and the amount
eligible as input tax credit; eligible as input tax credit;

(c) the input tax credit on account of central
tax, State tax, Union territory tax and
integrated tax shall be distributed separately
in accordance with the provisions of clause
(d);
Section 20 (2) (d) the input tax credit that is required to be
distributed in accordance with the
provisions of clause (d) and (e) of sub-
section (2) of section 20 to one of the
recipients R1, whether registered or not,
from amongst the total of all the recipients
to whom input tax credit is attributable,
including the recipient(s) who are engaged
in making exempt supply, or are otherwise
not registered for any reason, shall be the
amount, C1, to be calculated by applying
the following formula:-
(c) the input tax credit on account of central CGST, SGST, UTGST and IGST needs to be
tax, State tax, Union territory tax and separately distributed.
integrated tax shall be distributed separately
in accordance with the provisions of clause
(d);
(d) the input tax credit that is required to be The credit will be distributed to the relevant
distributed in accordance with the person on the basis of the turnover of that
provisions of clause (d) and (e) of sub- person to total turnover of last financial year
section (2) of section 20 to one of the / quarter as the case may be.
recipients R1, whether registered or not,
from amongst the total of all the recipients
to whom input tax credit is attributable,
including the recipient(s) who are engaged
in making exempt supply, or are otherwise
not registered for any reason, shall be the
amount, C1, to be calculated by applying
the following formula:-

C1=(t1T)C C1=(t1T)C
where, where,
Cistheamountofcredittobedistributed, Cistheamountofcredittobedistributed,
 THE GOODS AND SERVICES TAX (Input Tax Credit) RULES, 2017

Rule No. Rule title Form No. Time Limit Section Reference Draft Provision Final Provision Author's Analysis
t1 is the turnover, as referred to in section t1 is the turnover, as referred to in section
20, of person R1 during the relevant period, 20, of person R1 during the relevant period,
and and
T is the aggregate of the turnover of all T is the aggregate of the turnover of all
recipients during the relevant period; recipients during the relevant period;

the input tax credit on account of integrated the input tax credit on account of integrated The IGST credit will be distributed as IGST
tax shall be distributed as input tax credit of tax shall be distributed as input tax credit of credit.
integrated tax to every recipient; integrated tax to every recipient;

(f) the input tax credit on account of central (f) the input tax credit on account of central The CGST / SGST / UTGST credit will be
tax and State tax shall, tax and State tax shall, distributed as under,

i. in respect of a recipient located in i. in respect of a recipient located in a) In case the recipient is in the same

the same State in which the Input Service the same State in which the Input Service state in which ISD is located then,
Distributor is located, be distributed as input Distributor is located, be distributed as input
tax credit of central tax and State tax tax credit of central tax and State tax
respectively; respectively;
ii. in respect of a recipient located in a ii. in respect of a recipient located in a CGST will be transferred as CGST

State other than that of the Input Service State other than that of the Input Service
Distributor, be distributed as integrated tax Distributor, be distributed as integrated tax
and the amount to be so distributed shall be and the amount to be so distributed shall be
equal to the aggregate of the amount of equal to the aggregate of the amount of
input tax credit of central tax and State tax input tax credit of central tax and State tax
that qualifies for distribution to such that qualifies for distribution to such
recipient in accordance with clause (d); recipient in accordance with clause (d);

(g) The Input Service Distributor shall issue
an ISD invoice, as prescribed in sub-rule (1)
of rule invoice-7, clearly indicating in such
invoice that it is issued only for distribution
of input tax credit.
SGST
will be transferred as SGST
UTGST
will be transferred as UTGST
b) In case the recipient is in the different
state in which ISD is located then CGST,
SGST/UTGST credit will be transferred as
IGST credit.
(g) The Input Service Distributor shall issue ISD will be required to issue as Invoice for
an ISD invoice, as prescribed in sub-rule (1) distribution of credit.
of rule invoice-7, clearly indicating in such
invoice that it is issued only for distribution
of input tax credit.
 THE GOODS AND SERVICES TAX (Input Tax Credit) RULES, 2017

Rule No. Rule title Form No. Time Limit Section Reference Draft Provision Final Provision Author's Analysis
(h) The Input Service Distributor shall issue (h) The Input Service Distributor shall issue In case of reduction of input tax credit, the
an ISD credit note, as prescribed in sub-rule an ISD credit note, as prescribed in sub-rule same will be reduced by way of issuing
(1) of rule Invoice-7, for reduction of credit (1) of rule Invoice-7, for reduction of credit credit note by the ISD.
in case the input tax credit already in case the input tax credit already
distributed gets reduced for any reason. distributed gets reduced for any reason.

(i) Any additional amount of input tax credit
on account of issuance of a debit note to an
Input Service Distributor by the supplier shall
be distributed in the manner and subject to
the conditions specified in clauses (a) to (g)
and the amount attributable to any recipient
shall be calculated in the manner provided in
clause (d) above and such credit shall be
distributed in the month in which the debit
note has been included in the return in
FORM GSTR-6.
(i) Any additional amount of input tax credit In case of additional tax credit on account of
on account of issuance of a debit note to an increase in the input tax credit on account of
Input Service Distributor by the supplier shall revision in prices can be further distributed
be distributed in the manner and subject to in the same month in which the debit note
the conditions specified in clauses (a) to (f) reported in GSTR-6
and the amount attributable to any recipient Clause refernce corrected
shall be calculated in the manner provided in
clause (d) above and such credit shall be
distributed in the month in which the debit
note is included in the return in FORM GSTR-
6.

(j) Any input tax credit required to be
reduced on account of issuance of a credit
note to the Input Service Distributor by the
supplier shall be apportioned to each
recipient in the same ratio in which input tax
credit contained in the original invoice was
distributed in terms of clause (d) above, and
the amount so apportioned shall be,-
(j) Any input tax credit required to be
reduced on account of issuance of a credit
note to the Input Service Distributor by the
supplier shall be apportioned to each
recipient in the same ratio in which input tax
credit contained in the original invoice was
distributed in terms of clause (d) above, and
the amount so apportioned shall be,-
In case of reduction in the tax credit on
account of decrease in the input tax credit
on account of revision in value of the supply
needs to be reversed by adopting following
methodology,

i. reduced from the amount to be i. reduced from the amount to be

distributed in the month in which the credit distributed in the month in which the credit
note is included in the return in FORM GSTR- note is included in the return in FORM GSTR-
6; and 6; or
ii. added to the output tax liability of ii. added to the output tax liability of a) the tax amount to be distributed will be
the recipient and where the amount so the recipient and where the amount so reduced by the tax mount as per credit note
apportioned is in the negative by virtue of apportioned is in the negative by virtue of
the amount of credit to be distributed is less the amount of credit under distributioin
than the amount to be adjusted. being less than the amount to be adjusted.

b) In case of shortfall, the balance amount

will be added to the tax liability of the
recipient.
 THE GOODS AND SERVICES TAX (Input Tax Credit) RULES, 2017
Rule No. Rule title Form No. Time Limit Section Reference Draft Provision
(2) If the amount of input tax credit (2) If the amount of input tax credit In case of reduction in distribution amount
distributed by an Input Service Distributor is
reduced later on for any other reason for
any of the recipients, including that it was
distributed to a wrong recipient by the Input
Service Distributor, the process prescribed in
clause (j) of sub-rule (1) shall, mutatis
mutandis apply for reduction of credit.
GSTR-6 (3) Subject to sub-rule (2), the Input Service (3) Subject to sub-rule (2), the Input Service ISD Credit Note and the ISD invoice needs to
Distributor shall, on the basis of the ISD
credit note specified in clause (h) of sub-rule
(1), issue an ISD Invoice to the recipient
entitled to such credit and include the ISD
credit note and the ISD Invoice in the return
in FORM GSTR-6 for the month in which
such credit note and invoice was issued.
5 Manner of claiming credit in special Section 18 (1) (c) & (1) Input tax credit claimed in accordance
circumstances (d) with the provisions of sub-section (1) of
section 18 on the inputs lying in stock or
inputs contained in semi-finished or finished
goods lying in stock, or the credit claimed on
capital goods in accordance with the
provisions of clauses (c) and (d) of the said
sub-section, shall be subject to the following
conditions -
(a) The input tax credit on capital goods, in
terms of clauses (c) and (d) of sub-section (1)
of section 18, shall be claimed after reducing
the tax paid on such capital goods by five
percentage points per quarter of a year or
part thereof from the date of invoice or such
other documents on which the capital goods
were received by the taxable person.
Final Provision Author's Analysis
distributed by an Input Service Distributor is for any reason, the above mentioned
reduced later on for any other reason for methodology will be adopted.
any of the recipients, including that it was
distributed to a wrong recipient by the Input
Service Distributor, the process prescribed in
clause (j) of sub-rule (1) shall, mutatis
mutandis shall apply for reduction of credit.
Distributor shall, on the basis of the ISD be reported in GSTR-6
credit note specified in clause (h) of sub-rule
(1), issue an ISD Invoice to the recipient
entitled to such credit and include the ISD
credit note and the ISD Invoice in the return
in FORM GSTR-6 for the month in which
such credit note and invoice was issued.
(1) Input tax credit claimed in accordance This Rule is applicable in case a composition
with the provisions of sub-section (1) of dealer moves to normal scheme or exempts
section 18 on the inputs held in stock or supplies becomes taxable.
inputs contained in semi-finished or finished
goods held in stock, or the credit claimed on
capital goods in accordance with the
provisions of clauses (c) and (d) of the said
sub-section, shall be subject to the following
conditions -
(a) The input tax credit on capital goods, in
terms of clauses (c) and (d) of sub-section (1)
of section 18, shall be claimed after reducing
the tax paid on such capital goods by five
percentage points per quarter of a year or
part thereof from the date of invoice or such
other documents on which the capital goods
were received by the taxable person.
The credit of input tax paid on capital goods
will be allowed after reducing credit by 5%
per quarter from the date of invoice.
 THE GOODS AND SERVICES TAX (Input Tax Credit) RULES, 2017

Rule No. Rule title Form No. Time Limit Section Reference Draft Provision Final Provision Author's Analysis
GST ITC-01 30 days Section 18 (1) (b) The registered person shall within thirty (b) The registered person shall within thirty Such dealer will be required to file Form GST
days from the date of his becoming eligible days from the date of his becoming eligible ITC-01 within 30 days from the date of
to avail of input tax credit under sub-section to avail of input tax credit under sub-section becoming eligible declaring that dealer is
(1) of section 18 shall make a declaration, (1) of section 18 shall make a declaration, eligible for availing input tax credit.
electronically, on the Common Portal in electronically, on the Common Portal in
FORM GST ITC-01 to the effect that he is FORM GST ITC-01 to the effect that he is
eligible to avail of input tax credit as eligible to avail of input tax credit as
aforesaid; aforesaid;

(c) The declaration under clause (b) shall (c) The declaration under clause (b) shall The declaration in GST ITC-01 should have
clearly specify the details relating to the clearly specify the details relating to the following details as on the last of transition,
inputs lying in stock or inputs contained in inputs held in stock or inputs contained in
semi-finished or finished goods lying in semi-finished or finished goods held in stock,
stock,orasthecasemaybe,capitalgoods orasthecasemaybe,capitalgoods

i. on the day immediately preceding i. on the day immediately preceding

the date from which he becomes liable to the date from which he becomes liable to
pay tax under the provisions of this Act, in pay tax under the provisions of this Act, in
the case of a claim under clause (a) of sub- the case of a claim under clause (a) of sub-
section (1) of Section 18, section (1) of Section 18,

ii. on the day immediately preceding ii. on the day immediately preceding a)Stock of Inputs

the date of grant of registration, in the case the date of grant of registration, in the case
of a claim under clause (b) of sub-section (1) of a claim under clause (b) of sub-section (1)
of Section 18, of Section 18,

iii. on the day immediately preceding iii. on the day immediately preceding b)Inputs contained in semi finished goods

the date from which he becomes liable to the date from which he becomes liable to
pay tax under section 9, in the case of a pay tax under section 9, in the case of a
claim under clause (c) of sub-section (1) of claim under clause (c) of sub-section (1) of
Section 18, Section 18,

iv. on the day immediately preceding iv. on the day immediately preceding c)Input contained in Finished goods

the date from which supplies made by the the date from which supplies made by the
registered person becomes taxable, in the registered person becomes taxable, in the
case of a claim under clause (d) of sub- case of a claim under clause (d) of sub-
section (1) of Section 18. section (1) of Section 18.

d)Capital Goods
 THE GOODS AND SERVICES TAX (Input Tax Credit) RULES, 2017
Rule No. Rule title Form No. Time Limit Section Reference Draft Provision
(d) The details furnished in the declaration
under clause (c) shall be duly certified by a
practicing chartered account or cost
accountant if the aggregate value of claim
on account of central tax, State tax and
integrated tax exceeds two lakh rupees.
(e) The input tax credit claimed in
accordance with clauses (c) and (d) of sub-
section (1) of section 18 shall be verified
with the corresponding details furnished by
the corresponding supplier in FORM GSTR-1
or as the case may be, in FORM GSTR- 4, on
the Common Portal.
6 Transfer of credit on sale, merger, GST ITC-02 (1) A registered person shall, on sale,
amalgamation, lease or transfer of a merger, de-merger, amalgamation, lease or
business transfer or change in ownership of business
for any reason, furnish the details of sale,
merger, de-merger, amalgamation, lease or
transfer of business, in FORM GST ITC-02
electronically on the Common Portal along
with a request to transfer the unutilized
input tax credit lying in his electronic credit
ledger to the transferee:
Final Provision Author's Analysis
(d) The details furnished in the declaration In case of claim of credit in excess of
under clause (b) shall be duly certified by a 2,00,000, certificate from practicing
practicing chartered account or cost Chartered Accountant or Cost Accountant
accountant if the aggregate value of claim needs to be obtained.
on account of central tax, State tax, UT Tax
and integrated tax exceeds two lakh rupees.
(e) The input tax credit claimed in Tax credit will be allowed only after
accordance with clauses (c) and (d) of sub- verification of corresponding sale by the
section (1) of section 18 shall be verified supplier.
with the corresponding details furnished by
the corresponding supplier in FORM GSTR-1
or as the case may be, in FORM GSTR- 4, on
the Common Portal.
(2) The amount of credit in case of supply of In case of removal of capital assets payment
capital goods or plant and machinery, for the has to be made for input tax availed after
purposes of sub-section (6) of section 18, reducing input tax credit @ 5% for every
shall be calculated by reducing the input tax quarter or part thereof from the date of
on the said goods at the rate of five issue of invoice
percentage points for every quarter or part
thereof from the date of issue of invoice for
such goods.
In other words, in case the supplier has not
filed / filed incorrectly, credit of the tax will
not be allowed.
(1) A registered person shall, in the event of Application in Form GST ITC-02, needs to be
sale, merger, de-merger, amalgamation, made in case of transfer of credit on Sale,
lease or transfer or change in ownership of merger, amalgamation, lease or transfer of
business for any reason, furnish the details business.
of sale, merger, de-merger, amalgamation,
lease or transfer of business, in FORM GST
ITC-02, electronically on the Common Portal
along with a request for transfer of
unutilized input tax credit lying in his
electronic credit ledger to the transferee:
 THE GOODS AND SERVICES TAX (Input Tax Credit) RULES, 2017
Rule No. Rule title Form No. Time Limit Section Reference Draft Provision
Provided that in the case of demerger, the
input tax credit shall be apportioned in the
ratio of the value of assets of the new units
as specified in the demerger scheme.
(2) The transferor shall also submit a copy of
a certificate issued by a practicing chartered
account or cost accountant certifying that
the sale, merger, de-merger, amalgamation,
lease or transfer of business has been done
with a specific provision for transfer of
liabilities.
(3) The transferee shall, on the Common
Portal, accept the details so furnished by the
transferor and, upon such acceptance, the
un-utilized credit specified in FORM GST ITC-
02 shall be credited to his electronic credit
ledger.
(4) The inputs and capital goods so
transferred shall be duly accounted for by
the transferee
in his books of account.
7 Manner of determination of input tax credit GSTR-2 (1) The input tax credit in respect of inputs
in certain cases and reversal thereof or input services, which attract the
provisions of sub-sections (1) or (2) of
section 17, being partly used for the
purposes of business and partly for other
purposes, or partly used for effecting taxable
supplies including zero rated supplies and
partly for effecting exempted supplies, shall
be attributed to the purposes of business or
for effecting taxable supplies in the following
manner, namely,-
(a) total input tax involved on inputs and
input services in a tax period, be denoted as
T;
(b) the amount of input tax, out of T, (b) the amount of input tax, out of T, Below steps needs to be followed for
attributable to inputs and input services
intended to be used exclusively for purposes
otherthanbusiness,bedenotedasT1; otherthanbusiness,bedenotedasT1;
Final Provision Author's Analysis
Provided that in the case of demerger, the
input tax credit shall be apportioned in the
ratio of the value of assets of the new units
as specified in the demerger scheme.
(2) The transferor shall also submit a copy of Certificate, certifying transfer of liabilities,
a certificate issued by a practicing chartered from practicing Chartered Accountant or
account or cost accountant certifying that Cost Accountant will be required to be
the sale, merger, de-merger, amalgamation, submitted.
lease or transfer of business has been done
with a specific provision for transfer of
liabilities.
(3) The transferee shall, on the Common
Portal, accept the details so furnished by the
transferor and, upon such acceptance, the
un-utilized credit specified in FORM GST ITC-
02 shall be credited to his electronic credit
ledger.
(4) The inputs and capital goods so
transferred shall be duly accounted for by
the transferee
in his books of account.
(1) The input tax credit in respect of inputs Under this Rule manner of identification of
or input services, which attract the credit of taxes paid on Input and Input
provisions of sub-sections (1) or (2) of services pertaining to taxable, exempt
section 17, being partly used for the supplies, zero rated supplies, non business
purposes of business and partly for other purpose is identified. The tax credit will be
purposes, or partly used for effecting taxable reversed provisionally every month.
supplies including zero rated supplies and
partly for effecting exempted supplies, shall
be attributed to the purposes of business or
for effecting taxable supplies in the following
manner, namely,-
(a) total input tax involved on inputs and
input services in a tax period, be denoted as
T;
attributable to inputs and input services identification and reversal of the credit,
intended to be used exclusively for purposes
 THE GOODS AND SERVICES TAX (Input Tax Credit) RULES, 2017

Rule No. Rule title Form No. Time Limit Section Reference Draft Provision Final Provision Author's Analysis
(c) the amount of input tax, out of T, (c) the amount of input tax, out of T,
attributable to inputs and input services attributable to inputs and input services
intended to be used exclusively for effecting intended to be used exclusively for effecting
exemptsupplies,bedenotedasT2; exemptsupplies,bedenotedasT2;

(d) the amount of input tax, out of T, in (d) the amount of input tax, out of T, in a)Identify total input tax credit (T)
respect of inputs on which credit is not respect of inputs and input services on
available under sub-section (5) of section 17, which credit is not available under sub-
bedenotedasT3; section(5)ofsection17,bedenotedasT3;

(e) the amount of input tax credit credited
to the electronic credit ledger of registered
person, be denoted as C1 and calculated
as:
C1 = T- (T1+T2+T3);
(f) the amount of input tax credit
attributable to inputs and input services
used exclusively in or in relation to taxable
supplies including zero rated supplies, be
denotedasT4;
(e) the amount of input tax credit credited b) Identify the input tax credit exclusively
to the electronic credit ledger of registered linked to non-business purpose (T1)
person, be denoted as C1 and calculated
as:
C1 = T- (T1+T2+T3); c) Identify input tax credit exclusively
linked to exempted supplies (T2)
(f) the amount of input tax credit d) Identify input tax credit which is not
attributable to inputs and input services eligible as credit (T3)
intended to be used exclusively for effecting
supplies other than exempted but including
zeroratedsupplies,bedenotedasT4;

(g) T1, T2, T3 and T4 shall be (g) T1, T2, T3 and T4 shall be e) Reduce the above ineligible tax credit
determined and declared by the registered determined and declared by the registered from the total credit. The balance credit will
person at the invoice level in FORM GSTR-2; person at the invoice level in FORM GSTR-2; be termed as (C1).

(h) Input tax credit left after attribution of (h) Input tax credit left after attribution of f) Identify the input tax credit which is
input tax credit under clause (g) shall be input tax credit under clause (g) shall be exclusively liked to taxable supplies including
called common credit, be denoted as C2 called common credit, be denoted as C2 that of zero rated supplies. (T4)
and calculated as: and calculated as:

C2 = C1- T4; C2 = C1- T4; g) Reduce the above tax (T4) from balance
credit (C1) to arrive at common credit
pertaining to taxable as well as exempted
supplies &/ non business purpose.

(i) The amount of input tax credit (i) The amount of input tax credit h) Out of the above common credit (C2)
attributable towards exempt supplies, be attributable towards exempt supplies, be reduce the tax (D1) pertaining to exempted
denotedasD1andcalculatedas: denotedasD1andcalculatedas: supplies by applying % of exempted
turnover to total turnover to balance tax
credit (C2)
 THE GOODS AND SERVICES TAX (Input Tax Credit) RULES, 2017

Rule No. Rule title Form No. Time Limit Section Reference Draft Provision Final Provision Author's Analysis
D1=(EF)C2 D1=(EF)C2 i) Apart from above, the common credit
pertaining to non-business purpose (D2) will
be reduced to the extent of 5% of total
common credit left i.e. (C2)

where, where, j) After reducing D1 and D2 from C2, the

balance credit will be eligible as ITC by way
of addition into output tax liability.

E is the aggregate value of exempt supplies,
that is, all supplies other than taxable and
zero rated supplies, during the tax period,
and
F is the total turnover of the registered
person during the tax period:
E is the aggregate value of exempt supplies k) The amount of credit i.e. D1 and D2 will
during the tax period, and be added to output tax liability of the
assessee.
F is the total turnover of the registered
person during the tax period:

Provided that where the registered person Provided that where the registered person The assessee has option to segregate the
does not have any turnover during the said does not have any turnover during the said amount of tax at invoice level itself.
tax period or the aforesaid information is not tax period or the aforesaid information is not
available, the value of E/F shall calculated available, the value of E/F shall calculated
by taking values of E and F of the last tax by taking values of E and F of the last tax
period for which details of such turnover are period for which details of such turnover are
available, previous to the month during available, previous to the month during
whichthesaidvalueofE/Fistocalculated; whichthesaidvalueofE/Fistocalculated;

Explanation: For the purposes of this clause,
the aggregate value of exempt supplies and
total turnover shall exclude the amount of
any duty or tax levied under entry 84 of List I
of the Seventh Schedule to the Constitution
and entry 51 and 54 of List II of the said
Schedule.
Explanation: For the purposes of this clause, The turnover for the purpose of this rule will
the aggregate value of exempt supplies and be turnover of last tax period i.e. last month.
total turnover shall exclude the amount of
any duty or tax levied under entry 84 of List I
of the Seventh Schedule to the Constitution
and entry 51 and 54 of List II of the said
Schedule.

(j) the amount of credit attributable to non- (j) the amount of credit attributable to non-
business purposes if common inputs and business purposes if common inputs and
input services are used partly for business input services are used partly for business
and partly for non-business purposes, be and partly for non-business purposes, be
denoted as D2, and shall be equal to five denoted as D2, and shall be equal to five
per cent. of C2; and per cent. of C2; and
 THE GOODS AND SERVICES TAX (Input Tax Credit) RULES, 2017

Rule No. Rule title Form No. Time Limit Section Reference Draft Provision Final Provision Author's Analysis
(k) the remainder of the common credit (k) the remainder of the common credit
shall be the eligible input tax credit shall be the eligible input tax credit
attributed to the purposes of business and attributed to the purposes of business and
for effecting taxable supplies including zero for effecting supplies other than exempted
rated supplies and shall be denoted as C3, supplies but including zero rated supplies
where,- andshallbedenotedasC3,where,-

C3 = C2 - (D1+D2); C3 = C2 - (D1+D2);
(l) The amount C3 shall be computed (l) The amount C3 shall be computed
separately for input tax credit of central tax, separately for input tax credit of central tax,
State tax, Union territory tax and integrated State tax, Union territory tax and integrated
tax; tax;
(m) The amount equal to D1 and D2 shall (m) The amount equal to D1 and D2 shall
be added to the output tax liability of the be added to the output tax liability of the
registered person: registered person:
Provided that if the amount of input tax Provided that where the amount of input tax
relating to inputs or input services which relating to inputs or input services used
have been used partly for purposes other partly for purposes other than business and
than business and partly for effecting partly for effecting exempt supplies has
exempt supplies has been identified and been identified and segregated at invoice
segregated at invoice level by the registered level by the registered person, the same
person, the same shall be included in T1 shall be included in T1 and T2
and T2 respectively, and the remaining respectively, and the remaining amount of
amount of credit on such input or input credit on such inputs or input services shall
servicesshallbeincludedinT4. beincludedinT4.

30th (2) The input tax credit determined under (2) The input tax credit determined under The amount reversal required will be
September sub-rule (1) shall be calculated finally for the sub-rule (1) shall be calculated finally for the recomputed on the basis of actual turnover
of financial year before the due date for filing financial year before the due date for filing for the financial year. In case of short
subsequent the return for the month of September the return for the month of September payment, the additional tax liable to be paid
year. following the end of the financial year to following the end of the financial year to will be added in the output tax liability. In
which such credit relates, in the manner which such credit relates, in the manner case of excess payment of tax, the same will
prescribed in the said sub-rule and, prescribed in the said sub-rule and, be allowed as credit.

Rule No. Rule title
8 Manner of determination of input tax credit
in respect of capital goods and reversal
thereof in certain cases
THE GOODS AND SERVICES TAX (Input Tax Credit) RULES, 2017
Form No. Time Limit Section Reference Draft Provision
(a) where the aggregate of the amounts
calculated finally in respect of D1 and D2 calculated finally in respect of D1 and D2
exceeds the aggregate of the amounts
determined under sub-rule (1) in respect of
D1 and D2, such excess shall be added to D1 and D2, such excess shall be added to
the output tax liability of the registered
person for a month not later than the month
of September following the end of the
financial year to which such credit relates
and the said person shall be liable to pay
interest on the said excess amount at the
rate specified in sub-section (1) of section 50
for the period starting from first day of April
of the succeeding financial year till the date
of payment; or
(b) where the aggregate of the amounts
determined under sub-rule (1) in respect of
D1 and D2 exceeds the aggregate of the D1 and D2 exceeds the aggregate of the
amounts calculated finally in respect of D1
and D2, such excess amount shall be
claimed as credit by the registered person in
his return for a month not later than the
month of September following the end of
the financial year to which such credit
relates.
Section 17 (1) & (2) (1) Subject to the provisions of sub-section
(3) of section 16, the input tax credit in
respect of capital goods, which attract the
provisions of sub-sections (1) and (2) of
section 17, being partly used for the
purposes of business and partly for other
purposes, or partly used for effecting taxable
supplies including zero rated supplies and
partly for effecting exempt supplies, shall be
attributed to the purposes of business or for
effecting taxable supplies in the following
manner, namely,-
Final Provision Author's Analysis
(a) where the aggregate of the amounts
exceeds the aggregate of the amounts
determined under sub-rule (1) in respect of
the output tax liability of the registered
person for a month not later than the month
of September following the end of the
financial year to which such credit relates
and the said person shall be liable to pay
interest on the said excess amount at the
rate specified in sub-section (1) of section 50
for the period starting from first day of April
of the succeeding financial year till the date
of payment; or
(b) where the aggregate of the amounts
determined under sub-rule (1) in respect of
amounts calculated finally in respect of D1
and D2, such excess amount shall be
claimed as credit by the registered person in
his return for a month not later than the
month of September following the end of
the financial year to which such credit
relates.
(1) Subject to the provisions of sub-section Under this Rule manner of identification of
(3) of section 16, the input tax credit in credit of taxes paid on capital goods
respect of capital goods, which attract the pertaining to taxable, exempt supplies, zero
provisions of sub-sections (1) and (2) of rated supplies, non-business purpose is
section 17, being partly used for the identified. The tax credit will be reversed
purposes of business and partly for other every month.
purposes, or partly used for effecting taxable
supplies including zero rated supplies and
partly for effecting exempt supplies, shall be
attributed to the purposes of business or for
effecting taxable supplies in the following
manner, namely,-
 THE GOODS AND SERVICES TAX (Input Tax Credit) RULES, 2017
Rule No. Rule title Form No. Time Limit Section Reference Draft Provision
(a) the amount of input tax in respect of
capital goods used or intended to be used
exclusively for non-business purposes or
used or intended to be used exclusively for
effecting exempt supplies shall be indicated
in FORM GSTR-2 and shall not be credited to
his electronic credit ledger;
(b) the amount of input tax in respect of
capital goods used or intended to be used
exclusively for effecting taxable supplies
including zero-rated supplies shall be
indicated in FORM GSTR-2 and shall be
credited to the electronic credit ledger;
(c) the amount of input tax in respect of
capital goods not covered under clauses (a)
and (b), denoted as A, shall be credited to
the electronic credit ledger and the useful
life of such goods shall be taken as five
years:
Provided that where any capital goods
earlier covered under clause (a) is
subsequently covered under this clause, the
value of A shall be arrived at by reducing
the input tax at the rate of five percentage
points for every quarter or part thereof and
the amount A shall be credited to the
electronic credit ledger;
(d) the aggregate of the amounts of A (d) the aggregate of the amounts of A
credited to the electronic credit ledger
under clause (c), to be denoted as Tc, shall
be the common credit in respect of capital
goods for a tax period:
Final Provision Author's Analysis
(a) the amount of input tax in respect of
capital goods used or intended to be used
exclusively for non-business purposes or
used or intended to be used exclusively for
effecting exempt supplies shall be indicated
in FORM GSTR-2 and shall not be credited to
his electronic credit ledger;
(b) the amount of input tax in respect of Below methodology needs to be adopted as
capital goods used or intended to be used per this rule,
exclusively for effecting taxable supplies
including zero-rated supplies shall be
indicated in FORM GSTR-2 and shall be
credited to the electronic credit ledger;
(c) the amount of input tax in respect of
capital goods not covered under clauses (a)
and (b), denoted as A, shall be credited to
the electronic credit ledger and the useful
life of such goods shall be taken as five
years:
Provided that where any capital goods a) Tax Credit pertaining to capital goods
earlier covered under clause (a) is exclusively used for non-business purpose or
subsequently covered under this clause, the exempted supplies needs to be identified.
value of A shall be arrived at by reducing This tax will not be credited to electronic
the input tax at the rate of five percentage credit ledger of the assessee.
points for every quarter or part thereof and
the amount A shall be credited to the
electronic credit ledger;
Explanation: An item of capital goods
declared under clause (a) on its receipt shall
not attract the provisions of sub-section (4)
of section 18 if it is subsequently covered
under this clause.
b) Tax credit pertaining to capital goods
credited to the electronic credit ledger exclusively used for taxable supplies
under clause (c), to be denoted as Tc, shall including zero rated needs to be identified.
be the common credit in respect of capital The credit of the same will be eligible and
goods for a tax period: tax amount will be credited to electronic
credit ledger.
 THE GOODS AND SERVICES TAX (Input Tax Credit) RULES, 2017

Rule No. Rule title Form No. Time Limit Section Reference Draft Provision Final Provision Author's Analysis
Provided that where any capital goods Provided that where any capital goods c)The balance credit capital goods (Tc) will
earlier covered under clause (b) is earlier covered under clause (b) is be divided by 60 to arrive at per month tax
subsequently covered under this clause, the subsequently covered under clause (c), the amount (Tm) assuming 5 years residual life
value of A arrived at by reducing the input value of A arrived at by reducing the input (12 months x 5 years = 60 months)
tax at the rate of five percentage points for tax at the rate of five percentage points for
every quarter or part thereof shall be added every quarter or part thereof shall be added
totheaggregatevalueTc; totheaggregatevalueTc;

(e) the amount of input tax credit (e) the amount of input tax credit d) The summation of credit of all common
attributable to a tax period on common attributable to a tax period on common capital assets will be done. (Tr).
capital goods during their residual life, be capital goods during their useful life, be
denotedasTmandcalculatedas:- denotedasTmandcalculatedas:-
Tm=Tc60 Tm=Tc60 e) The summation of Tax pertaining to
common assets (Tr) will be reduced by tax
on exempted / non-business supplies arrived
by applying % of turnover of exempted
supplies / total supplies.

(f) the amount of input tax credit, at the
beginning of a tax period, on all common
capital goods whose residual life remains
during the tax period, be denoted as Tr and
shall be the aggregate of Tm for all such
capital goods.
(f) the amount of input tax credit, at the
beginning of a tax period, on all common
capital goods whose residual life remains
during the tax period, be denoted as Tr and
shall be the aggregate of Tm for all such
capital goods.

(g) the amount of common credit (g) the amount of common credit No reversal of tax credit on common capital
attributable towards exempted supplies, be attributable towards exempted supplies, be goods required when those capital goods
denotedasTe,andcalculatedas: denotedasTe,andcalculatedas: used for non-business purpose.

Te=(EF)xTr
where,
E is the aggregate value of exempt supplies,
that is, all supplies other than taxable and
zero rated supplies, during the tax period,
and
F is the total turnover of the registered
person during the tax period:
Te=(EF)xTr
where,
E is the aggregate value of exempt supplies
made, during the tax period
F is the total turnover of the registered
person during the tax period:

 THE GOODS AND SERVICES TAX (Input Tax Credit) RULES, 2017

Rule No. Rule title Form No. Time Limit Section Reference Draft Provision Final Provision Author's Analysis
Provided that where the registered person Provided that where the registered person
does not have any turnover during the said does not have any turnover during the said
tax period or the aforesaid information is not tax period or the aforesaid information is not
available, the value of E/F calculated by available, the value of E/F shall be
taking values of E and F of the last tax calculated by taking values of E and F of
period for which details of such turnover are the last tax period for which details of such
available, previous to the month during turnover are available, previous to the
whichthesaidvalueofE/Fistocalculated; month during which the said value of E/F is
to calculated;

Explanation: For the purposes of this clause,
the aggregate value of exempt supplies and
total turnover shall exclude the amount of
any duty or tax levied under entry 84 of List I
of the Seventh Schedule to the Constitution
and entry 51 and 54 of List II of the said
Schedule;
Explanation: For the purposes of this clause,
the aggregate value of exempt supplies and
total turnover shall exclude the amount of
any duty or tax levied under entry 84 of List I
of the Seventh Schedule to the Constitution
and entry 51 and 54 of List II of the said
Schedule;

(h) the amount Te along with applicable
interest shall, during every tax period of the
residual life of the concerned capital goods,
be added to the output tax liability of the
person making such claim of credit.
(h) the amount Te along with applicable
interest shall, during every tax period of the
useful life of the concerned capital goods, be
added to the output tax liability of the
person making such claim of credit.

(2) The amount Te shall be computed
separately for central tax, State tax, Union
territory tax and integrated tax.
9 (1) Manner of reversal of credit under special 18 (4) and 29 (5) of (1) The amount of input tax credit, relating
circumstances CGST Act to inputs lying in stock, inputs contained in
semi-finished and finished goods lying in
stock, and capital goods lying in stock, for
the purposes of sub-section (4) of section 18
or sub-section (5) of 29, shall be determined
in the following manner namely,-
(2) The amount Te shall be computed Separate computation required for CGST,
separately for central tax, State tax, Union SGST, UTSGST and IGST.
territory tax and integrated tax.
(1) The amount of input tax credit, relating In cases where registered person opts for
to inputs held in stock, inputs contained in composition scheme or his
semi-finished and finished goods lying in goods/services/both becomes wholly
stock, and capital goods held in stock, for exempted and in case of cancellation of
the purposes of sub-section (4) of section 18 registration, manner of reversal of input tax
or sub-section (5) of 29, be determined in credit has been prescribed.
the following manner namely,-
 THE GOODS AND SERVICES TAX (Input Tax Credit) RULES, 2017
Rule No. Rule title Form No. Time Limit Section Reference Draft Provision
(a) For inputs lying in stock, and inputs
contained in semi-finished and finished
goods lying in stock, the input tax credit shall
be calculated proportionately on the basis of
corresponding invoices on which credit had
been availed by the registered taxable
person on such input.
(b) For capital goods lying in stock the input
tax credit involved in the remaining residual
life in months shall be computed on pro-rata
basis, taking the residual life as five years;
Illustration
Capital goods have been in use for 4 years, 6
month and 15 days.
The residual remaining life in months= 5
months ignoring a part of the month
Input tax credit taken on such capital
goods=
Input tax credit attributable to remaining
residual life=C multiplied by 5/60
9 (2) (2) The amount, as prescribed in sub-rule (1) (2) The amount, as prescribed in sub-rule (1) For reversal referred above, amount shall be
shall be determined separately for input tax shall be determined separately for input tax determined for IGST and CGST separately
credit of IGST and CGST. credit of integrated tax and central tax.
Final Provision Author's Analysis
(a) for inputs held in stock and inputs a. For inputs proportionate credit as per
contained in semi-finished and finished corresponding invoice pertaining to the
goods held inputs
in stock, the input tax credit shall be
calculated proportionately on the basis of
corresponding invoices on which credit had
been availed by the registered taxable
person on such input;
b. For capital goods credit pertaining to
the remaining residual life in months
considering residual life as 5 years.
(b) for capital goods held in stock the input
tax credit involved in the remaining useful
life in months shall be computed on pro-rata
basis, taking the useful life as five
years.
Illustration
Capital goods have been in use for 4 years, 6
month and 15 days.
The residual remaining life in months= 5
months ignoring a part of the month
Input tax credit taken on such capital
goods=
Input tax credit attributable to remaining
residual life=C multiplied by 5/60
 THE GOODS AND SERVICES TAX (Input Tax Credit) RULES, 2017
Rule No. Rule title Form No. Time Limit Section Reference Draft Provision
9 (3) (3) Where the tax invoices related to the
inputs lying in stock are not available, the
registered person shall estimate the amount
under sub-rule (1) based on the prevailing
market price of goods on the effective date
of occurrence of any of the events specified
in sub-section (4) of section 18 or, as the
case may be, sub-section (5) of section 29.
9(4) GST ITC-03 (4) The amount determined under sub-rule
(1) shall form part of the output tax liability
of the registered person and the details of
the amount shall be furnished in FORM GST
ITC-03, where such amount relates to any
event specified in sub-section (4) of section
18 and in FORM GSTR-10, where such
amount relates to cancellation of
registration.
And
GSTR-10
Final Provision Author's Analysis
(3) Where the tax invoices related to the In case invoices are not available for reversal
inputs held in stock are not available, the of credit referred above, reversal shall be
registered person shall estimate the amount made based on prevailing market price of
under sub-rule (1) based on the prevailing the goods on the date of opting composition
market price of goods on the effective date scheme or effective date of exemption or
of occurrence of any of the events specified date of cancellation of registration.
in sub-section (4) of section 18 or, as the
case may be, sub-section (5) of section 29.
(4) The amount determined under sub-rule Amount of reversal referred in sub-section 1
(1) shall form part of the output tax liability above, shall be added in output tax liability
of the registered person and the details of of the registered person.
the amount shall be furnished in FORM GST
ITC-03, where such amount relates to any
event specified in sub-section (4) of section
18 and in FORM GSTR-10, where such
amount relates to cancellation of
registration.
Such amount to be shown in ITC-03 by
person opting for composition and in case of
cancellation of registration in GSTR-10.
(5) The details furnished in accordance with Certificate from practicing Chartered
sub-rule (3) shall be duly certified by a Accountant or Cost Accountant will be
practicing chartered accountant or cost required to be submitted in case invoice is
accountant. not available in case of registered person opt
for composition scheme or cancellation of
registration
 THE GOODS AND SERVICES TAX (Input Tax Credit) RULES, 2017

Rule No. Rule title Form No. Time Limit Section Reference Draft Provision Final Provision Author's Analysis
(6) The amount of input tax credit for the In case of amount determined of input tax
purposes of sub-section (6) of section 18 credit reversal is more than tax on
relating to capital goods shall be determined transaction value, the same shall be treated
in the same manner as prescribed in clause as output liability and to be reported in GSTR-
(b) of sub-rule (1) and the amount shall be 1
determined separately for input tax credit of
IGST and CGST.
Where the amount so determined is more
than the tax determined on the transaction
value of the capital goods, the amount
determined shall form part of the output tax
liability and the same shall be furnished in
FORM GSTR1.

10 Conditions and restriction in respect of GSTR-1 143 of CGST Act (1) The inputs or capital goods shall be sent
inputs and capital goods sent to the job to the job worker under the cover of a
worker challan issued by the principal, including
where the inputs or capital goods are sent
directly to job-worker.
(1) The inputs, semi-finished goods or capital
goods shall be sent to the job worker under
the cover of a challan issued by the principal,
including where such goods are sent directly
to a job-worker.
A challan shall be issued by the Principal
for input or capital goods to be sent to Job
Worker from his premises or directly from
supplier premises.

A challan should contain details required

to be mentioned on an Invoice.

(2) The challan issued by the principal to the (2) The challan issued by the principal to the Details of challans in respect of goods
job worker shall contain the details specified job worker shall contain the details specified sent or received from a job worker shall be
in rule Invoice.8: in rule Invoice.8: included in GSTR-1.

(3) The details of challans in respect of goods
dispatched to a job worker or received from
a job worker during a tax period shall be
included in FORM GSTR-1 furnished for that
period.
(4) If the inputs or capital goods are not
returned to the principal within the time
stipulated in section 143, the challan issued
under sub-rule (1) shall be deemed to be an
invoice for the purposes of this Act.
(3) The details of challans in respect of goods If goods are not received from job
dispatched to a job worker or received from worker within stipulated time Challan would
a job worker during a tax period shall be be treated as an Invoice for supply of goods.
included in FORM GSTR-1 furnished for that
period.
(4) Where the inputs or capital goods are not
returned to the principal within the time
stipulated in section 143, the challan issued
under sub-rule (1) shall be deemed to be an
invoice for the purposes of the Act.
 THE GOODS AND SERVICES TAX (Input Tax Credit) RULES, 2017

Rule No. Rule title Form No. Time Limit Section Reference Draft Provision Final Provision Author's Analysis
Explanation.- For the purposes of this Explanation.- For the purposes of this
Chapter,- Chapter,-
(1) capital goods shall include plant and (1) capital goods shall include plant and
machinery as defined in the Explanation to machinery as defined in the Explanation to
section 17; section 17;
(2) for determining the value of an exempt (2) for determining the value of an exempt
supply as referred to in sub-section (3) of supply as referred to in sub-section (3) of
section section
17:- 17:-
(a) the value of land and building shall be (a) the value of land and building shall be
taken as the same as adopted for the taken as the same as adopted for the
purpose of purpose of
paying stamp duty; and paying stamp duty; and
(b) the value of security shall be taken as (b) the value of security shall be taken as
one per cent. of the sale value of such one per cent. of the sale value of such
security. security.