Mr. B, a registered taxable person, was paying tax at composition rate upto 30th July. However, w.e.f. 31st July, Mr. B becomes liable to pay tax under regular scheme. Mr. B will be eligible for ITC on inputs held in stock and inputs contained in semi-finished or finished goods held in th stock and on capital goods as on 30 July. ITC on capital goods will be reduced by 5% per quarter from the date of the invoice. Capital goods have been in use for 4 years, 6 month and 15 The useful remaining life in months = 5 months ignoring a part of the month. ITC taken on such capital goods = C ITC attributable to remaining useful life = C x 5/60 6.43 Utilisation of ITC ITC is credited to a registered person’s electronic credit ledger. The person may use this to pay his output tax liability. The use of ITC for payment of tax on state supplies is the point in which GST differs sharply from the previous system of central and taxation. In GST, inter-state supplies are levied to IGST, which is the sum of the applicable CGST and SGST / UTGST. In terms of section 49(5), ITC of IGST can be used to pay IGST, CGST and SGST/UTGST in that order.  ITC of CGST can be used to pay CGST and IGST in that order.  ITC of SGST/UTGST can be used to pay SGST/UTGST and IGST in that order.  ITC of CGST cannot be utilized towards payment of SGST/UTGST and vice
Mr. B, a registered taxable person, was paying tax at composition rate upto 30th July. However, w.e.f. 31st July, Mr. B becomes liable to pay tax under regular scheme. Mr. B will be eligible for ITC on inputs held in stock and inputs contained in semi-finished or finished goods held in stock and on capital goods as on 30 th July. ITC on capital goods will be reduced by 5% per quarter from the date of the invoice. Capital goods have been in use for 4 years, 6 month and 15 The useful remaining life in months = 5 months ignoring a part of the month. ITC taken on such capital goods = C ITC attributable to remaining useful life = C x 5/60 6.43 Utilisation of ITC ITC is credited to a registered person’s electronic credit ledger. The person may use this to pay his output tax liability. The use of ITC for payment of tax on supplies is the point in which GST differs sharply from the previous system of central and state taxation. In GST, inter-state supplies are levied to IGST, which is the sum of the applicable CGST and SGST / UTGST. In terms of section 49(5),  ITC of IGST can be used to pay IGST, CGST and SGST/UTGST in that order.  ITC of CGST can be used to pay CGST and IGST in that order.  ITC of SGST/UTGST can be used to pay SGST/UTGST and IGST in that order. ITC of CGST cannot be utilized towards payment of SGST/UTGST and vice