GENERAL RESTRICTIONS IN INPUT TAX CREDIT UNDER GST ACT

• If tax has been paid in pursuance of any order where any demand on account of non-levy, short levy or excess refund or excess ITC utilization has been raised on account of any fraud, wilful misstatement or suppression of facts, recipient cannot avail credit.
• Where the goods or services or both are used by the registered person partly for the purpose of any business and partly for other purposes, the amount of credit shall be restricted to so much of the input tax as is attributable to the purposes of his business.
• Where the goods or services or both are used by the registered person partly for effecting taxable supplies and partly for effecting exempted supplies, the amount of credit shall be restricted to so much of the input tax as is attributable to the taxable supplies including zero-rated supplies. The value of exempted supply shall be calculated in terms of formula prescribed in Rules and shall include supplies on which the recipient is liable to pay tax on Reverse Charge basis, transactions in securities, sale of land and sale of building.
• A banking company or a financial institution including a non-banking financial company, engaged in supplying services by way of accepting deposits, extending loans or advances shall have the option to either comply with the an amount equal to fifty per cent of the eligible input tax credit on inputs, capital goods and input services in that month and the rest shall lapse.
• Payment for supplies received has to be made within a maximum period of 180 days, otherwise ITC already claimed will be added, with interest to output tax liability.
• If depreciation on Capital goods has been claimed then ITC to that extent is not admissible.
• ITC would also not be permissible if invoice or debit note is received after due date of filing return for September of next financial year or filing annual return whichever is later