Big news for realty companies amid the turmoil in the stock market - Supreme Court gives relief

ITC- The Supreme Court's decision on input tax credit has come. Input tax credit on construction cost has been approved. The Supreme Court has approved ITC on commercial construction cost. The Supreme Court has made this announcement for realty companies. ITC will be available on commercial building construction.

What is this input tax credit? Understand how it affects the business of small and big businessmen...

When we talked to experts on this matter, they told that suppose a businessman went to buy raw material worth Rs 100 to make namkeen. The raw material supplier paid 12 percent tax on this, so the manufacturer had to pay Rs 112 for the raw material, but this tax of Rs 12 will be different from the cost. Now the manufacturer made namkeen from this raw material and kept his margin on it at Rs 8. After this, the businessman will sell it to the wholesaler. The businessman will have to pay 18 percent GST, Rs 19.44 on Rs 108 and the wholesaler will have to pay Rs 127.44. Till now, tax was levied on the tax paid, that is, the tax paid became the cost, but in GST the cost will remain Rs 100 only. The wholesaler paid Rs 19.44 to the businessman, which he paid while buying raw material along with Rs 100, will be reduced by Rs 12. The GST will have to be paid to the government by only Rs 7.44. Here, the Rs 12 left by the Namkeen maker is the input tax credit. Now you must be thinking that why has the government introduced this system of paying less tax again after paying tax earlier in GST? So the answer to this is that theoretically, in the current system, it has been said to give tax credit on the finished goods to the producer i.e. the manufacturer of the goods in lieu of the tax paid on the raw material in both the cases of central taxes and VAT. Since the entire integrated system is not ready for this yet, the system of input tax credit has been introduced. Understand it in this way also that the tax at the first level of use of any goods will be called input tax and it will work as credit for the next level. That is, that tax will be reduced and what is received next is the input tax credit. The savings made by the manufacturer of the goods will make the goods cheaper from the wholesaler to the buyer. The benefit of the input tax credit system in GST can be availed only when everyone, from the provider of raw material to the manufacturer and the seller of goods to the customer, has got themselves registered.

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