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Can Companies avail Input Tax Credit for most of their Business Expenses?

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The Goods and Services Tax(GST) has recently been introduced in India and it has completely changed the way that we have viewed taxation forever. This new taxation scheme is to be applicable for goods and services and has subsumed the numerous indirect taxes that existed before and has brought them all into one common tax. The scheme has received both praise and criticism. It cannot be denied that the scheme’s introduction has definitely shaken up the economy in a large way.

Business save your input tax credit using virtual office address in India
Businesses can save Input Tax Credit(ITC)

The simple online registration procedure for GST has made it so that it is easier to get one’s business registered under the scheme. Before a business registers itself under the scheme, the owner of the business should check if they are eligible for it or not. The benefits of the scheme’s introduction have been discussed below:

Benefits of the GST scheme

These are some of the benefits of the GST scheme:

Getting rid of the cascading effect of taxes

GST helped to do away with the cascading system of taxes that were in place before. This essentially meant getting rid of the system of “tax on tax”. Under the GST scheme, all the taxes would now be brought together so that the cascading of taxes does not take place any more.

Exemption for small businesses

Since there is a higher threshold for registration under the GST scheme in terms of turnover, many small businesses get to be exempted from registering under the scheme. This will help them save money.

Easy online registration

The entire GST registration process can take place online which can make things a lot less tedious than they normally would be. Businesses would normally have to run from place to place to get themselves registered for taxation schemes but they do not have to worry about that anymore. The online registration scheme makes things a lot easier and a lot of time can be saved as well.

Avoiding compliances

Before GST was introduced, there were many compliances that had to be dealt with for each tax. Now, since the taxes have been subsumed, there is one field that has to be taken care of. This will save a lot of time which can now be spent much more productively.

Improved logistics

Before the introduction of the GST scheme, businesses had the habit of keeping several warehouses all over India so they would not have to deal with the different tax laws that were in effect in each state. Having to constantly manage all these different laws was found to be difficult for many people. After the introduction of GST, since most of the taxes have been subsumed, the laws for transferring goods across states have also become common. Thus, goods can be stored at warehouses located at better positions than before, now that the fear of trying transportation laws is gone.

Composition scheme

This scheme allows businesses possessing a turnover below a certain limit to pay lower taxes according to certain conditions. This will help small businesses escape from paying an unnecessarily high amount of taxes. The money that is saved through the scheme can be invested in the success of the business.

Input Tax Credit(ITC)

ITC allows businesses to reduce the tax they paid on the inputs when they are paying taxes on the output. There are certain conditions that have to be satisfied if a business wants to avail ITC:

  • A registered dealer must have issued the business a tax invoice
  • The business should have received the goods and services
  • The supplier should have paid the taxes that were charged on the businesses’ purchase to the government

Example to show how ITC works

It is easier to understand the concept of ITC with the following example:

Imagine that you are a manufacturer and you have paid a tax of Rs 500 for your final product and Rs 400 for the input charges. You can now claim ITC on your Rs 400 and only have to pay Rs 100 as a tax amount. You can now understand how much money can be saved using ITC. It is an incredible feature whose impact should not be undermined.

Cases where ITC cannot be claimed

ITC can only be claimed for goods and services that are used for business purposes. It cannot be claimed if the purchases have been made for non-business or personal purposes. These are some of the cases where ITC cannot be claimed:

  • For motor vehicles, unless they are used to promote supplying other such similar vehicles
  • For food and beverages, health services, cosmetic and plastic surgery, and outdoor catering, unless an inward supply is used by someone to create an outward supply(for the same type of goods or services)
  • For renting a cab, health insurance, and life insurance, unless an employer is under an obligation to provide these services to their employee
  • For getting a club or health and fitness centre membership
  • For any travel benefits that may be availed by employees when they are on vacation
  • For goods and services in cases where the tax has been paid under the composition scheme, has been obtained by a non-resident taxable person, or been used for personal consumption
  • For goods that have been lost, stolen, or destroyed 
  • For work contract services in case of constructing an immovable property unless it is for some input service that will help in further supply of the works contract service
  • For goods and services that have been used for constructing an immovable property for the advancement of the business

Documents that can be used to get ITC

These are the documents on the basis of which ITC can be claimed:

  • An invoice from the supplier of the goods or services
  • An invoice from the recipient with proof of them having paid tax
  • Debit note from the supplier
  • Bill of entry
  • Revised invoice
  • Document from Input Service Distributor
How can Businesses save your ITC using GST Address in India
Companies can save GST Input Tax Credit with Virtual Office Address

Important facts about ITC

These facts about ITC will help you have more knowledge about how it is used:

  • Only people who have their appropriate particulars in the invoice can avail ITC
  • ITC can be claimed as a refund if the tax amount paid on the inputs is greater than that for the outputs
  • The tax that is remaining after getting ITC will be deposited with the government by the 20th of the following month in GSTR-3(monthly return)
  • ITC cannot be claimed after the September of the next financial year to which the invoice is concerning
  • ITC can be claimed by someone in terms of goods in stock as soon as it is a day from the date for which they are liable for registration if they have registered under the GST scheme within a period of 30 days after they become liable for the registration
  • ITC can be claimed by someone in terms of goods in stock as soon as it is a day from the date for which they are liable for registration when they switch to the normal GST scheme from the composition scheme under Section 10
  • ITC can be claimed by someone in terms of goods in stock related to exempt supplies if an exempt collection of goods or services becomes taxable
  • Unused ITC can be sent to the receiver of the transfer in case there has been a change of constitution of a registered person because of a sale or merger
  • ITC can be claimed from the GST that has been paid under the Reverse Charge Mechanism
  • ITC can be claimed on GST for capital goods
  • ITC cannot be claimed if depreciation has been claimed on the capital goods’ tax component

Role of InstaSpaces

InstaSpaces is completely dedicated to ensuring that all the customers that seek us out get what they need. We are always deeply moved when someone chooses to work with us. We have worked with clients all over India and have a library of virtual office addresses for you to choose from, available all over India. In addition to providing virtual office spaces, we also register businesses under the GST scheme. We can also provide you with all the documents that you need for the GST registration so you never have to worry about doing it all on your own. 

We will ensure that you get your business registered under the scheme as soon as possible if you want it to be done. Once your business has been registered, we will help you avail ITC if you are eligible for it according to the conditions laid out under the GST scheme. We will apprise you of all the information that you need in great detail. We are incredibly excited to get to know you better and work with you. In case you have any doubts, you can always reach out to us directly or through our website where we have a virtual assistant who can help you out. We hope that our future partnership turns out to be one built on trust and goodwill. 

Phone:- +91–888-270-2020
Email:- [email protected]

Happy Office Hunting!

Advantages of ITC (Input Tax Credit) in GST for E-commerce sellers or Online Sellers in India

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If a person is using ITC(input tax credit) under GST, it means that when they are paying the tax for their output, they can reduce the tax they already paid for their inputs away from this amount and pay the remainder. ITC can only be claimed for business purposes and cannot be claimed for goods and services that have been used for personal use. It also cannot be used for exempt supplies.

With the new GST system in place, the way that we have viewed the tax system in India has completely changed. A consumption-based tax, GST has replaced all of the indirect taxes that have been levied on goods and services normally by the Indian government. For e-commerce companies, the rules are slightly more complicated. GST made the welcome change of reducing taxes for small businesses.

Why is ITC good for online sellers

ITC is a great advantage for online sellers in many ways. They can use the input tax credit to reduce their taxes. This will also prevent them from losing money unnecessarily for the sake of their taxes. In the case that you have just spent a certain amount of money in GST on the materials needed to make a product, you will also charge a higher rate of GST when you sell that product to a customer.

Financial Advantages of ITC (input tax credit) for GST registration for e-Commerce sellers in India.
GST ITC for Online Sellers in India | Virtual Office Address

Under the GST scheme, Input Tax Credit(ITC) can be used by online sellers to reduce their tax burden. The seller will only have to pay the difference of the tax that was paid on input and output as tax to the government. This allows online sellers to have an excellent opportunity to save money that they can invest in the success of their business. It is important that sellers understand the concept of the ITC feature before they proceed to use it.

Normally, you would have to pay this amount to the government. However, using the ITC, you can deduct the original GST that you charged to your customer from what the government expects from you. This means that you will now pay a smaller tax to the government.

Requirements to get ITC under GST

  • The applicant must have a tax invoice that has been issued to them by a registered dealer
  • The applicant must have already received the goods or services for which they are trying to get the ITC for
  • The tax that has been applied to the applicant’s purchases must have been paid to the government by the supplier in cash
  • The supplier of the product or service must have filled in the GST returns

Documents required to claim ITC under GST

  • A copy of the invoice from the supplier of the products or services
  • A copy of the applicant’s invoice(who is not a registered dealer and is a recipient of the goods and services)
  • A debit note issued by the supplier of the products or services if the tax charged in an invoice has been found to be of a lesser amount than that which is normally payable for such products or services
  • A bill of entry which will be needed for an integrated tax on imports
  • A credit note issued by an ISD(Input Service Distributor-business that distributes taxes on the basis of the tax invoices received for the products or services)
  • A bill of supply that has been provided by a dealer who is trying for a compensation scheme

How to claim ITC

In the form GSTR-3B, normal taxpayers must report the amount of ITC in their monthly GST returns section. ITC can be claimed in GSTR-3B to a degree of 20% of the ITC mentioned by the suppliers in the GSTR-2A return. The person who wishes to claim the ITC should carefully check GSTR-2A before they go to GSTR-3B.

Reversal of ITC(Input Tax Credit)

These are some of the situations in which ITC can be reversed:

  • If the invoice has not been paid within 180 days of its issue
  • If a credit note has been sent by the seller to the Head Office
  • If inputs have been used for personal purposes
  • If capital goods have been used for personal purposes

Role of InstaSpaces

Our team here at InstaSpaces is extremely excited to work with you towards helping you successfully claim ITC in GST. Since the world is rapidly changing, we understand how important it is for online sellers to be able to adapt to the constant changes that they may face in their environment.

Save your Input Tax Credit using Virtual Office with GST Address in India
Online Sellers get Virtual Office Address for GST Registration in India

Being able to work in a cost-efficient manner is incredibly important towards ensuring that online sellers do not lose out on money to taxes unnecessarily. Understanding all the new rules that are present under GST may be difficult for you at first but you need not fret as we are here to guide you patiently.

We will assist you in understanding the nuances of what you have to do in order to claim the IST. As a company that specializes in GST registration and helping people find new virtual offices, we are extremely experienced at handling complicated documentation for our clients. We are ecstatic at the prospect of working with you to help you claim your ITC successfully and watch your business prosper too. Please trust in us as we go on this journey together.

Phone:- +91–888-270-2020
Email:- [email protected]

Happy Office Hunting

Travel Agents can avail GST ITC in Ladakh by taking Virtual Office Space

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The travel industry in Ladakh is a flourishing business and there has been a steady increase in demand for physical spaces to run business. The space that is allocated to establish a physical business setup in the union territory of Ladakh is a questionable venture due to many factors. Now the perfect solution to run a business without owning physical office space is virtual office spaces and who better to approach than InstaSpaces for your requirements of virtual office space.

How can Travel Agents avail GST Input tax credit in Ladakh with the help virtual office address
Virtual Office for GST Registration – Travel Agents GST

InstaSpaces have a gratifying experience in providing virtual office spaces in India and especially in Union territories that make them top-notch in the game. There are a lot of doubts that arise when it comes to setting up a business in a place like Ladakh and we are here to solve the same for you. 

Virtual Office Spaces: A seemingly booming business concept

Virtual office spaces are business space ventures that provide all the features that go behind in running an actual physical office without actually owning one. The prime features of virtual office space include;

  1. An office space where you can run business with an actual physical address in prime locations in and around Ladakh. 
  2. The office space that will be equipped with all the amenities of an office and you can use them all by paying a minimal amount that is far less than paying for maintaining an actual physical office space.
  3. The office address will come along with a GST registration to help you benefit from transactions and tax credit between your clients.

These features will definitely give you a head start in your profit margins and can also help you in benefitting the extension plans of your business with minimal investment. There are also other such benefits that come along with a virtual office that won’t erode the actual capital that you invested in running the physical business. 

How can Travel Agents avail GST Input tax credit in Ladakh

When you are starting with virtual office space in Ladakh, it is crucial to get a GST registration to get started with the business. To get started with availing Input tax credit under GST, the first thing to do is get your business registered under GST using a GST registration. For that, you would have to provide our team with the following documents. A No-Objection Certificate (NOC). The rental agreement for the defined period of existence. A utility bill that is more recent.

Now that you are set up with a GST registration, you are eligible for the input tax credit. This means that yes if you are a travel agent in Ladakh you can avail input tax credit under GST if you avail a virtual office space under GST registration. before you go on availing the input tax credit, there is a certain number of criteria that you need to fulfill to complete the process.

How can travel agent get virtual office address for GST registration in Ladakh
GST Input Tax Credit using Virtual Office Space in Ladakh – Virtual Office for GST Registration
  1. You must have a tax invoice of purchase or debit note issued by a registered dealer that will help you to confirm the credibility of the transaction
  2. You must have received the services or goods that are provided by the registered dealer. 
  3. The tax charged on the services must be deposited/paid to the government. 
  4. A supplier must have filed the GST returns 

If you fulfill the above conditions then you are eligible to avail of a GST input tax credit in Ladakh while availing a virtual office space under GST registration.

There are some key points that you must remember while you avail Input tax credit under GST;

  1. It is not applicable to personal use.
  2. The input tax credit is allowed only after the returns are filed for the financial year 
  3. It cannot be availed on purchases invoices that are more than a year old. 

Why taking virtual office space for GST registration in Ladakh

The economy of India is a vast space and is definitely a booming space for establishing a new business or run extension plans, especially in union territories. Ladakh is a land that attracts a lot of traffic with its tourism scope and that gives travel agents and travel businesses a great opportunity to develop and expand the business.

Ladakh is also an immense space for trade opportunities making it a potential area to start new ventures, but with virtual office spaces, the development can be even more profitable and less-investment consuming. The travel and tourism commerce have ample market to extend operations in Ladakh giving more opportunities to partner with InstaSpaces. 

When there is a huge booming economy the commercial space to set up actual offices becomes increasingly demanding especially in union territories. The problem arises when there is no space to establish business and that’s where virtual office spaces step in to solve the issues and who better to do it than us, InstaSpaces.

Virtual office spaces in a union territory like Ladakh can be a great solution to the increase in demand for office spaces for GST registration and with InstaSpaces we make the process a smooth and hassle-free one.

Process of taking virtual office space in Ladakh

Now if you looking to come onboard with InstaSpaces in Ladakh to set up a virtual office space, the process is pretty simple.

How to get travel agent virtual office address for GST registration in Ladakh
Get Travel Agent Virtual Office for GST Registration

You need to first register with us and tell us your requirement, select from our options from where you can set up your virtual office space, Customise all the requirements that you would need in the office starting from chairs to desks, projectors boards and many more that are all available on request. Once we are done with the Onboarding process, we will take care of the rest!

We hope this article gave you insight, on how a virtual office can help you acquire virtual office space in Ladakh. Contact our Instabuddies on-site to help you with more of the details and process if you still have doubts!

To learn more about InstaSpaces, feel free to contact us at the points below.

Phone:- +91–888-270-2020
Email:- [email protected]

If you have any more doubts or queries, feel free to text our Instabuddies on site.

Happy office hunting!

Save your GST Input Tax Credit with Virtual Office

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If you have a business that provides goods and services in more than one state, then you will definitely have hard time filling for your GST input credit. As under the GST regime the invoicing has to be organized according to the state where the goods or services are sold, Further input tax credit under GST is state centric. Simply saying, If you want to Claim your 9% of GST Input Tax Credit then you must have GST registration in the state where you are supplying your goods or services. And for GST registration you will require Office address in each of those states where your are serving. Now imagine, how expensive would it be to have physical office in all the states your business operates. There is an alternative solution to it, Virtual Office. With Virtual office space, you can own an office without having to rent a complete physical office space. You can use the professional addresses of premium business centers and coworking spaces at a fraction of a cost.

What is Input Tax Credit?

GST Input Credit means the GST Tax credit any business can avail of its purchases and permissible expenses. Every business has to mandatorily pay GST on any purchases for the business. Further, every business should, in turn, offset this amount of tax paid already with the GST it has to deposit to the government for its sales made. GST Rates are very high currently and range between 5% to 28%, where 18% is the usual standard across services business. This is a very high percentage for any business, therefore every prudent business should claim all the possible GST Input Credit on every purchase or permissible expenses. Further, if any business is losing GST input credit as their supplier/vendor is giving them SGST invoice of the supplier’s state. The business cannot claim the input credit on such purchases, as they are not registered in that state. If this input tax credit is a substantial amount, every business should indeed get GST registration done for each of such states, in which their input tax credit is getting stuck. Business Address proof documents are the starting point for getting GST Registration in every state. Here virtual office solutions are what a business can avail. You get the rent agreement, NOC and electricity bill for professional business centers at INR 1000/month.  

What is Virtual Office?

Virtual Office is a real Business address provided by premium business centers and coworking spaces. With Virtual office, you can own an office without having to rent complete physical office space. You will be provided with professional addresses of premium business centers and coworking spaces at INR 1000-3000 per month. You will get following documents with Virtual Office, 1) No-Objection Certificate 2) Rental Agreement 3) Address Proof (Utility Bill) In addition to that, you can also avail mail handling services and signage at that office address. With Virtual Office you will be able to get your GST Registration across all 29 states in India at fraction of a cost.

Virtual Office Bangalore

Starting at Rs. 1500 per Month.

Virtual Office in Delhi

Starting at Rs. 1200 per Month.

Virtual Office in Mumbai

Starting at Rs. 1200 per Month.

Physical Office vs Virtual Office

FAQs

Can a GST number be obtained on a virtual office address? Yes, with proper rent agreement documentation, GST number can be obtained with Virtual Office. Address Proof, Rent Agreement on Stamp paper and NOC from legal owner is provided. What are the major cities where InstaSpaces provides virtual office services? InstaSpaces provides virtual office address in all 29 states & 7 UT’s of India. The major cities included are Delhi, Mumbai, Chennai, Bangalore, Hyderabad, Kolkata, Gurgaon, Noida, Pune, and all the metro cities.
What all documents are provided under Virtual Office for GST Registration? Proper Address Proof, Agreement and NOC from the legal owner of the premises. The documents have to be in proper desired format and guidelines as outlined by the GST Authorities. Does InstaSpaces provide cheap virtual office address for GST Registration? Yes, we provide a wide range of virtual office spaces from cheapest to premium ones in most prime business districts of the city. Also, we provide an end-to-end solution submitting your GST registration (at additional charges).

 

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