Income Tax (India)

  Let us first understand the concept of reverse charge mechanism: Generally, the supplier of goods or services is liable to pay GST. However, under the reverse charge mechanism, the liability to pay GST is cast on the recipient of the goods or services. Reverse charge means the liability to pay tax is on the recipient of supply of goods or services instead of the supplier of such goods or services in respect of notified categories of supply [Section 2(98)]. There are two types of reverse charge scenarios provided in law. (i) First scenario occurs in case of supply of specified categories of goods or services, covered by section 9(3) of the CGST/ SGST (UTGST) Act. Similar provisions are contained under section 5(3) of the IGST Act. (ii) Second scenario occurs in case of supply of specified categories of goods or services made by an unregistered supplier to specified class of registered recipients, covered by section 9(4) of the CGST Act. Similar provisions are contained un...

GST composition scheme was implemented under the respective State VAT Laws with conditions applied on eligibility for the scheme accordingly. GST composition scheme assures greater compliance without the requirement of maintaining records. Composition Scheme is a simple and easy scheme under GST for taxpayers. Small taxpayers can get rid of tedious GST formalities and pay GST at a fixed rate of turnover. This scheme can be opted by any taxpayer whose turnover is less than Rs. 1.5 crore*. * CBIC has notified the increase to the threshold limit from Rs 1 Crore to Rs. 1.5 Crores. Who can opt for composition scheme? A taxpayer whose turnover is below Rs 1.5 crore can opt for Composition Scheme. In case of North-Eastern states and Himachal Pradesh, the limit is now Rs 75 lakh. As per the CGST (Amendment) Act, 2018, a composition dealer can also supply services to an extent of ten percent of turnover, or Rs.5 lakhs, whichever is higher. This amendment will be applicable from the 1st of Feb, ...

Every registered person is allowed to take tax credit for input tax.  Input credit helps in determining the correct amount of working capital at any given point of time. This is highly critical information from business liquidity standpoint. Meaning of input tax credit Input tax in relation to a registered person, means the central tax, state tax, or union territory tax charged on any supply of goods or services or both made to him ,  for any supply of goods and/or services to him or purchases he makes, which are used or are intended to be used, for the furtherance of his business.  it does not include the tax paid under the composition levy. What are the conditions for claiming input tax credit? Sec 16 of CGST act provides some conditions, input tax credit can only be claimed after fulfilling these conditions: The said goods or services or both are used or intended to be used in the course or in the furtherance of business. Possession of tax-paying document Every Registe...