Que:
A firm has received grant and utilised the grant for purchase of computers and also for availing consultancy service. Can firm claim ITC on all such expenditure?
Ans.
Section 16(1) brings out the main requirement of any tax being
eligible as ITC, which is ‘it must be used or intended to be used in the
course or furtherance of his business’. As long as this condition is
satisfied along with other conditions in section 16, ITC is eligible for
the firm.
The fact that these procurements are out of a grant received from outside India or within India does not affect the ITC’s eligibility.
Reference of Sec 16:
Section -16 CGST Act, 2017
Every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person
Notwithstanding anything contained in this section, no registered person shall be entitled to the credit of any input tax in respect of any supply of goods or services or both to him unless,
he is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying documents as may be prescribed;
he has received the goods or services or both.
subject to the provisions of section {41 or sec 43A}*, the tax charged in respect of such supply has been actually paid to the Government, either in cash or through utilisation of input tax credit admissible in respect of the said supply; and
he has furnished the return under section 39.
Comments