Webinar on GST

How does GST Eliminate Tax on Tax? [Video]

In the current regime of indirect tax system, the chain of input credit, at a certain point, is broken. Let’s say Central Sales Tax (CST) applicable on interstate trade is non-creditable, leading to a break in the input credit chain. Similarly, a manufacturer charging excise duty on sale to a dealer causes the chain to break. This leads to taxes forming a part of the product cost.

How to Set Off Input Tax Credit Against Tax Liability in the GST Regime

Now let us understand how to set off your input credit against your tax liability in the GST regime. 

GST is a dual concept system. On every transaction (within a state), there will be component of Central GST (CGST) and State GST (SGST). Integrated GST (IGST) is for interstate transactions. Therefore, it is important for businesses to know how to set off the input credit against each of these components in the order as prescribed by the Law.

The order in which credit needs to be set off is explained in the table below:

Registered Dealer? Learn How to Transition to GST

With each passing day, we are moving one step closer to the GST regime. The GST Bill has been  approved by the President, and the GST Council is in the process of forming the rules. As businesses begin their preparation towards the new taxation system, obtaining your GST registration is the first step in GST transition process.

Liability for Registration in GST

Region	Aggregate Turnover
North East India + Sikkim, J&K, Himachal Pradesh and Uttarakhand	Rs 10 Lakhs
Rest of India	Rs 20 Lakhs