How to differentiate Reversal of input tax credit with Revenue neutral rate?
Difference between Revenue neutral rate and Reversal of input tax credit under GST terms
What is Reversal of input tax credit? How does Revenue neutral rate work under GST regime? What are the difference between Reversal of input tax credit and Revenue neutral rate?
A registered person, who has availed of input tax credit on any inward supply of goods or services or both, but fails to pay to the supplier thereof, the value of such supply along with the tax payable thereon, within the time limit specified in the second proviso to sub-section (2) of section 16, shall furnish the details of such supply, the amount of value not paid and the amount of input tax credit availed of proportionate to such amount not paid to the supplier in FORM GSTR-2 for the month immediately following the period of one hundred and eighty days from the date of the issue of the invoice.
Focus under GST is to arrive at such rates which would not decrease the current revenue generation by Central & State government. Revenue neutral rate (RNR) is a structure of different rates established in order to match the current revenue generation with revenue under GST. RNR calculation has to include the cascading effect on certain goods having no excise or sales tax implications.
The details about Reversal of input tax credit and Revenue neutral rate with simple language from GST terms have been mentioned in this web blog separately. We suggest you to read these articles on Reversal of input tax credit and Revenue neutral rate, so as to enable you to have a clear idea on these GST terms.
For your immediate reference, we give below web links on Reversal of input tax credit and Revenue neutral rate separately below. You may kindly read the below links to know more about Revenue neutral rate and Reversal of input tax credit.
Term Reversal of input tax credit in the case of non-payment under GST
Term Revenue neutral rate (RNR) under GST
The above information easily explains about Revenue neutral rate and Reversal of input tax credit .
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