ITC - Input Tax Credit

Input Tax Credit

·         What is Input Tax Credit ? 

Ans:  Input Tax Credit means at the time of paying tax on output, you can reduce the tax you have already paid on inputs and pay the balance amount.

Example: A is a manufacturer.  Tax payable on the manufactured product is Rs. 200 /-.  However he already paid tax Rs. 75/- at the time of purchase of Raw materials.  So he can pay balance tax Rs. 125/- (i.e., Rs. 200 - Rs.75/-). duly availing the Input Tax Credit to the extent of Rs. 75/-.  Otherwise, he would be liable to pay the tax two times i.e., at the time of purchasing Raw Materials and Selling of manufactured product.

Event	Tax	Remarks
On manufacture of goods	Rs.200/-	Tax liability
On purchase of Raw materials	Rs. 75 /-	Already paid.
Balance Tax to be paid	Rs. 125/-	To be paid (duly availing Rs.75/- as ITC)

·         ITC is one of the fundamental features of GST

·         Seamless flow of input credit across the chain (from the manufacture of goods till it is consumed) and across the country.

·         A person registered under composition scheme in GST cannot claim ITC.

ü  ITC can be claimed only for business purposes. ITC will not be available for goods or services exclusively used for: a. Personal use b. Exempt supplies c. Supplies for which ITC is specifically not available

ü   

*****

SOP examples by Shri Afzalluddin, Sr.AFA/FX/SCR

Click for SOP examples 

by Shri Afzalluddin, Sr.AFA/FX/SCR

FAQ – Passing marks /Aggregate Percentage / Exemption in Appendix 3 Examination

FAQ – Passing marks /Aggregate Percentage / Exemption in

Appendix 3 Examination

Click here RailwayBoard letter - Appendix3 exam details

  What are the passing marks for the examination ?

Ans:

Paper	General category	SC/ST category
Advanced Book keeping	40 %	30%
General Rules & Procedures	40%	30%
Optional Paper  with Books	40%	30%
Optional Paper without books	40%	30%

Note: 45% for general category and 35% for SC/ST category in aggregate in both papers of Optional subject

Example

Mr A  (OC candidate)secured the following marks in Appendix3 exam

Subject	Minimum passing marks	Minimum Aggregate %	Secured	Secured Aggregate%	Result	Remarks
General Rules & Procedure	40	-	42	-	Passed
Advanced Book keeping	40	-	36	-	failed
Optional Paper one with books	40	45	65	= 65+39/2 = 52%	Failed	Though he secured aggregate 52% , he didn’t secured minimum of 40 marks in without books paper
Optional paper  one without books	40		39		Failed
Optional Paper Two with books	40	45	49	= 49+40/2 =44.5%	Failed	Though he secured minimum 40 marks in both papers, he failed to get aggregate 45%
Optional paper Two without books	40		40		Failed

That means, OC candidate has to secure minimum of 40% marks in each paper and 45% in aggregate of both the papers (with books and without books)

Mr B  (SC/ST candidate) secured the following marks in Appendix3 exam

Subject	Minimum passing marks	Minimum aggregate %	Secured	Aggregate	Result	Remarks
General Rules & Procedure	30	-	33	-	Passed
Advanced Book keeping	30	-	28	-	failed
Optional Paper one with books	30	35	42	= 42+28/2 =35%	Failed	Though he secured aggregate 35%, he didn’t secured minimum of 30 marks in without books paper
Optional paper  one without books	30		28		failed
Optional Paper Two with books	30	35	39	= 39+30/2 =34.5%	Failed	Though he secured minimum 30 in both papers, he failed to get aggregate 35% .
Optional paper Two without books	30		30		Failed

That means, SC/ST candidate has to secure minimum of 30% marks in each paper and 35% in aggregate of both the papers (with books and without books)

Exemption – Common for both OC & SC/ST candidates

 A candidate who fails in the examination but shows marked excellence in any subject by obtaining not less than 60 per cent of the maximum marks of that subject will be exempted from further examination in that subject in subsequent examinations. 

Examples are 

Subject	Qualify for exemption	Aggregate Percentage for exemption	Secured	Secured Aggregate percentage	Exempted  or  not exempted	Remarks
General Rules & Procedure	60	-	65	-	Exempted
Advanced Book keeping	60	-	58	-	Not exempted	He got only 58 marks.
Optional Paper one with books	60	60	85	85+55/2 = 70%	Not Exempted	Though he got aggregate 60%, he failed to get 60% in without books paper
Optional paper  one without books	60		55
Optional Paper Two with books	60	60	61	61+62/2= 61.5%	Exempted
Optional paper Two without books	60		62

That means, 60% marks required in individual paper as well as aggregate for both papers of optional paper to exempt.