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2023 (7) TMI 521 - AUTHORITY FOR ADVANCE RULING, KERALAAdmissibility of the ITC in respect of the goods purchased from out sourced vendors, when the payment is settled through book adjustment against the debt created on the outward supplies effected to these vendors itself - HELD THAT:- On a plain reading of the provisions namely; Explanation 2 to sub-section (2) and clause (b) of sub-section (3) of Section 12 and Explanation (ii) to sub-section (2) and clause (a) of subsection (3) of Section 13 it is evident that the entry in the books of accounts of the supplier/recipient is recognised as a mode of payment under GST law. Therefore, on a combined reading of the above referred provisions and the definition of consideration in Section 2 (31) of the CGST Act, 2017 it is evident that the settlement of the mutual debts through book adjustment by the applicant is a valid mode of payment of consideration for the receipt of goods and/or services and it satisfies the requirement of the second proviso to sub-section (2) of Section 16 of the CGST Act, 2017. The input tax credit is admissible when consideration is paid through book adjustment, subject to the other conditions and restrictions prescribed in Sections 16, 17 and 18 of the CGST Act, 2017 and the rules made there under.
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