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CS Professional · Goods and Services Tax (GST) and Corporate Tax Planning · Input Tax Credit and Computation of GST Liability

Which statement correctly describes the amount credited under Section 41(1)?

Section 41(1) allows credit of eligible input tax only, and that amount is credited to the electronic credit ledger. Ineligible tax is not covered, and the cash ledger or liability register is not the destination.

  1. ACredit of eligible input tax, credited to the electronic credit ledgerCorrect
  2. BCredit of all input tax charged, whether eligible or not, credited to the electronic cash ledger
  3. CCredit of eligible input tax, credited to the electronic liability register
  4. DCredit of output tax payable, credited to the electronic credit ledger

Explanation

Section 41(1) entitles the person to avail credit of eligible input tax, and the amount is credited to the electronic credit ledger. Ineligible credit is excluded, and the cash ledger and liability register are different records.

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