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Provided that the input tax credit on account of State tax shall be utilized towards payment of integrated tax only where the balance of the input tax credit on account of central tax is not available for payment of integrated tax. Illustrations attached: - 153 Illustration-1 M/s ABC is manufacturer of readymade garments and has tax liability of Rs. 1 Lakh (IGST-50,000/-, CGST-25,000/-, SGST-25,000/-). He has made inter-State purchase with IGST ITC amounting to Rs. 75,000/- and has made local purchase with CGST ITC and SGST ITC of Rs. 7,500/- each. Description IGST CGST SGST Tax Liability 50,000 25,000 25,000 IGST ITC 50000 *12500 *12500 CGST ITC 7,500 SGST ITC 7,500 Tax paid in cash NIL 5,000 5,000 *Balance ITC IGST has been equally utilized for discharge of CGST and SGST tax liability. As per formula proposed, the total incentive is calculated is Formula = (C+S)/2 = (5000+5000)/2 = 5,000/- Since the commodity is taxable at the rate of 12%, therefore incentive allowed is 75% of formula i.e. 75/100 * 5000 = Rs. 3,750/- Illustration-2 M/s XYZ is manufacturer of high strength steel has total liability of Rs. 1 Lakh, (IGST- 60,000/-, CGST-20,000, SGST-20,000). He has made inter-State purchase with IGST ITC amounting to Rs. 80,000/- and has made local purchase with CGST ITC and SGST ITC of Rs. 5,000/- each. Description IGST CGST SGST Tax Liability 60,000 20,000 20,000 IGST ITC 60,000 *10,000 *10,000 CGST ITC 5,000 SGST ITC 5,000 Tax paid in cash NIL 5,000 5,000 *Balance ITC IGST has been equally utilized for discharge of CGST and SGST tax liability. As per formula proposed, the total incentive is calculated is Formula = (C+S)/2 = 10,000/2 = 5,000/- 154 Since commodity is taxable at the rate of 18%, therefore incentive allowed is 50% of formula i.e. 50/100 * 5000 = Rs. 2,500/- Illustration-3 M/s ABC is manufacturer and exporter (assuming the commodity is taxable @12%). The taxpayer has exports amounting to Rs. 5,00,000/- (without payment of tax under LUT) and Intra State outward supplies of Rs. 15,00,000/-. The tax liability is of Rs. 1,80,000/- (CGST- 90,000/-, SGST-90,000/-). There are inward supplies (excluding capital goods) having ITC amounting to Rs. 1,00,000/-(IGST 80,000/-, CGST 10,000/-, SGST 10,000/-). Description IGST CGST SGST Tax Liability - 90,000 90,000 IGST ITC - 40,000 40,000 CGST ITC - 10,000 - SGST ITC - - 10,000 Tax paid in cash - 40,000 40,000 As per formula proposed, the total incentive is calculated as: Formula = (C+S)/2 = (40000+40000)/2=40000/- Since the commodity is taxable at the rate of 12%, therefore incentive allowed is 75% of formula i.e. 75/100*40000 = 30,000/- GST Refund calculation: Net ITC = 1,00,000 Export turnover = 5,00,000 Aggregate turnover = 20,00,000 GST refund = (Net ITC x Export turnover) Aggregate turnover = (1,00,000 x 5,00,000) 20,00,000 = 25,000/- Incentive allowed = 30,000 - 25,000 = 5,000/- 155 Annexure – B Illustration for Clause 12.8(B)(7), 12.9(2), 12.10(2) and 12.11(4) Clause: 100% exemption for 7/10/15 years up to 100% of FCI or 100% exemption on the power consumption corresponding to the Electric Load (KW) required for installed capacity as recorded in the approved DPR whichever is lower, from the date of release of power connection for new units/from the date of commercial production after expansion for expansion cases, Illustration-1:- A) Power Consumption as per Sanction Load