Input tax credit on stock

Seven of the GST certificates deal with the input tax credit on goods held on the day before an event:

All seven use the same wizard.

The event

Enter the event date. The certificate and its annexure refer to the stock held on the day before that date, and OptiVida works that date out for you.

• Chapter 2 also asks for the method used to value the stock. It is printed on the annexure.
• Chapters 6–8 also ask for the date of the market price used. Rule 44(3) allows an estimate at market price only where the tax invoices are not available. Tick the box to confirm that Management has declared the invoices unavailable. The certificate cannot be issued until you do.

The stock

Enter one line per item. Choose its category:

• (a) inputs held in stock
• (b) inputs contained in semi-finished or finished goods
• (c) capital goods — Chapters 3, 4 and 6–8 only (on Chapter 8, capital goods or plant and machinery)

For each line, enter:

• the supplier's GSTIN or earlier registration
• the invoice or bill of entry
• the description, UQC and quantity
• the value, after debit and credit notes
• the tax on each head: central, State, Union territory, integrated and cess

Annexure A prints the lines grouped by category, with totals. Where an invoice cannot be identified, the annexure notes that the first-in-first-out method may be followed.

Capital goods are calculated, not typed

For a capital goods line, enter the tax on the invoice and its date. OptiVida works out the credit. The row shows the result as you type, and Annexure B sets out the working.

Chapters 3 and 4 use Rule 40(1)(a). The credit is reduced by five percentage points for every quarter, or part of a quarter, from the invoice date. The Guide's example: an invoice dated 15 July 2023 and an event on 1 March 2024 give 3 quarters. So ₹1,50,000 of tax becomes ₹1,27,500 of credit.

Chapters 6–8 use Rule 44(1)(b). The credit to reverse is the part of the tax for the remaining useful life, out of five years, ignoring any part of a month. With the same dates, 52 months remain. So ₹1,50,000 × 52 ÷ 60 = ₹1,30,000.

Each tax head is worked out separately — for Chapters 6–8 because Rule 44(2) requires it. A capital goods line without an invoice date cannot be issued.

What the certificates say

Chapters 1–4 give reasonable assurance that the particulars in Form GST ITC-01 are drawn from the books. The Opinion says the particulars are fairly presented and agree with the records. Management is responsible for physically verifying the stock.

Chapters 6–8 keep three paragraphs from the Guide. They matter because the value is an estimate:

• a review of Management's estimates, in the Guide's negative form: nothing has come to our attention that suggests the assumptions are unreasonable
• a warning that actual results may differ, perhaps materially
• a statement that you did not physically verify the stock, and relied on the applicant's declaration

Thresholds

For Chapters 1–4, the aggregate claim of central, State, Union territory and integrated tax must be more than two lakh rupees. Capital goods count at their reduced figure, and cess does not count. Chapters 6–8 have no threshold.

Generating this certificate costs credits. You are shown the exact cost in the confirmation before it runs, and the current price list is on Settings → Credits and billing.