GST- TAX CREDIT

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What is mean by tax credit mil jayega?

suppose I have a shop and I sell more than 20 lakh means turnover is more than 20 lakh ,and a second shop near me whose turn over is not more than 20 lakh ,since he will not pay GST so it’s obvious that his price is less than me .Then why a customer buy from my  shop.

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GST - Input tax credit Tax Clinic Question 2 years 1 Answer 109 views 0

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  1. taxclinic_team700

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    NO,

    lets suppose

    CASE 1:- you register under GST purchased goods from abc & co. @100 on which rs.10 as input tax which is not added in your cost because you claim itc on such tax ,now your cost will be rs.90. you have a profit margin let’s say rs. 10 then your sale price become 100+10(output gst) = 110 price charged from customer.

    you will get 10 as input tax credit under GST.

    CASE 2:- MR.X not registered under GST he  purchased goods from abc & co. @100 on which rs.10 as tax levied and he can’t take the benefit of ITC under GST. so, his cost become rs. 100 and his profit margin same as rs. 10 and now he charged from customer of rs. 110.

    There is no impact on price because you claim ITC on goods.

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