CS Executive · Tax Laws and Practice · Input Tax Credit and Computation of GST Liability
As per Section 20(3) of the CGST Act, 2017, how may an Input Service Distributor distribute the credit of central tax?
Central tax credit can be distributed as central tax or integrated tax. Section 20(3) allows this by way of a document stating the credit amount, issued in the prescribed manner, and integrated tax credit likewise as integrated tax or central tax.
- AOnly as central tax
- BAs central tax or integrated taxCorrect
- COnly as State tax
- DOnly as integrated tax
Explanation
Section 20(3) provides that central tax credit is distributed as central tax or integrated tax, and integrated tax as integrated tax or central tax, by issuing a prescribed document. Limiting it to a single tax type, as in the distractors, misstates the provision.
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