Order of utilisation of input tax credit.

Section 49B

Notwithstanding anything contained in this Chapter and subject to the provisions of clause (e) and clause (f) of sub-section (5) of section 49, the Government may, on the recommendations of the Council, prescribe the order and manner of utilisation of the input tax credit on account of integrated tax, central tax, State tax or Union territory tax, as the case may be, towards payment of any such tax.

AI Explanation

In this section, we'll break down and simplify a complex statement regarding the utilization of input tax credit. Let's make it more understandable.

Government's Authority

The government holds the power to decide how businesses can use their input tax credit. Input tax credit is like a discount that businesses get on the taxes they pay for goods and services. The government, with the advice of the Council, can set rules on how this credit can be used.

Specific Rules to Note

There are a couple of important points to consider:

1. Clause (e) and Clause (f) of Sub-Section (5) of Section 49: These are specific parts of the law that lay down certain conditions. The government's decision on input tax credit usage must align with these conditions.

2. Recommendations of the Council: The Council plays a role in advising the government on tax-related matters. The government takes these recommendations into account when deciding how businesses can use their input tax credit.

Applying Input Tax Credit

Businesses receive input tax credit for the taxes they've paid on integrated tax, central tax, state tax, or union territory tax. They can use this credit to offset or reduce the amount they need to pay for these taxes.

In summary, this statement basically says that the government, with input from the Council, can determine the rules for businesses to use the input tax credit they receive. This credit helps businesses by lowering the amount of taxes they have to pay.