Relevant definitions:
(a) Taxable person (2(107)): Means a person who is registered or liable to be registered under section 22 or section 24. As such, the liability to pay tax devolves on every ‘taxable person’ whether or not registration has been sought. A plain reading of the input tax credit provisions makes it clear that input tax credit would be available only to a registered person and to a limited extent pre-registration credits are available under section 18(1). In case taxes are paid after registration for past periods, the credit for period beyond 1 month from registration may not be available even if it is a bona fide error. This may not be the intention but law does not enable such credits. (However, credit for period beyond 1 month from registration only holds true in cases where a person applies for registration within a period of 30 days from the date on which he becomes liable to obtain registration)
(b) Input tax credit: means the credit of “input tax” in terms of section 2(63).
(c) Input tax: “Input tax” in terms of section 2(62) in relation to a registered person, means the Central tax, State tax, Integrated tax or Union territory tax charged on any supply of goods or services or both made to him and includes:
— integrated goods and service tax (IGST) charged on import of goods.
— tax payable on reverse charge basis under IGST Act /SGST Act /CGST Act /UTGST Act.
— but excludes tax paid as a composition levy.
Section 9(3) and 9(4) of CGST Act (similarly section 5(3) and 5(4) of the IGST Act) levies tax on goods or services or both on reverse charge. Therefore, ‘input tax credit’ is the tax paid by a registered person under the Act whether as a forward charge or reverse charge for the use of such goods or services or both in the course or furtherance of his business. Currently, the taxes payable under reverse charge in terms of section 9(4) of the Act or section 5(4) of the IGST Act has been exempt till 30.06.2018.
(d) Electronic credit ledger: The input tax credit as self-assessed in the return of registered person shall be credited to electronic credit ledger in accordance with section 41, to be maintained in the manner as may be prescribed. [Section 2(46) read with
Section 49(2)].
(e) “Capital goods” means goods, the value of which is capitalised in the books of account of the person claiming the input tax credit and which are used or intended to be used in the course or furtherance of business [Section 2(19)].
(f) Input: “Input” in terms of section 2(59) means
— any goods,
— other than capital goods,
— used or intended to be used by a supplier
— in the course or furtherance of business
(g) Input service: “Input service” in terms of section 2(60) means
— any service
— used or intended to be used by a supplier
— in the course or furtherance of business.
(h) “Works Contract” in terms of Section 2(119) means a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract;