IGST Mechanism and availability of ITC, Goods and Services Tax - GST

[Archna Gupta]

Dear All

Suppose the supplier is registered in UP and he makes inter state supply to the recipient in Delhi and charges IGST. Let's assume the POS of this transaction is Haryana (or any state other than Delhi).

My query is whether the recipient of Delhi can avail ITC of IGST paid on this transaction where the POS is any state other than Delhi.

Thanks in advance.

Archna Gupta

Posts / Replies

[Alkesh Jani]

Hon’ble Experts,

Please allow me to express my views on the issue discussed above.

At the very outset, portal is required to be aligned with the provisions of Act and Rules made thereunder. One cannot act as per the portal. The self-assessment method is chosen in GST, apart from renting of immovable property various other services may be provided for which IGST is applicable and hence portal gives that freedom of self-assessment. All the invoices uploaded by the supplier are reflected (made available) under FORM GSTR-2A and GSTR-2B, but it is on the assessee to assess the eligibility for availing ITC. If ITC is not available to the assessee, he is required to reverse in FORM GSTR-3B in appropriate column.

We can criticize, make representation to Council and Government, but we should not forget that they have their own limitations, for example, new returns as per recommendation of GoM, i.e. Sahaj, Saral and Sugam, GSTR-2 and GSTR-3, are kept in abeyance, the Model GST Law and Present features are different, these is all because of circumstances and challenges faced by the Government.

POS is to be determined as per provisions of IGST Act, 2017. In our case, it is specifically mentioned in Section 12(3) of IGST Act and Explanation given makes the provision very clear.

The question raised is whether registration is to be taken for each such if the supplier has property in many other states? The answer is “YES”, the reason is as per provision of CGST Act, person is required to take registration if his aggregate turnover is more than the threshold limit. Renting of immovable property is for business, to run a business one has to adhere to the law. To avoid any tax evasion government, enact the laws and rules are framed. If registration is not taken it will be difficult for government to track such transactions and even the supplier will not be able to justify the same, if proper accounting is not made. Larger Perception and wider perspective is required in the case.

Lastly, if any such doubt arises, one can opt for advance ruling, which is time bound and less expensive. To sum up above, we are to follow the provisions of law and rules made thereunder.

All the views expressed above are for information purpose only.

Thanks

[KASTURI SETHI]

Sh.Alkesh Jani Ji,

Excellent reply and topmost drafting. You have echoed my views.

[Alkesh Jani]

Shri Kasturiji Sir,

It is said "If the only prayer you ever say in your entire life is thank you, it will be enough.- by Meister Eckhart"

Thanks for your words of appreciation.

With Due Regards

[Narendra Soni]

Section 2 (62) “input tax” in relation to a registered person, means the central tax, State tax, integrated tax or Union territory tax charged on any supply of goods or services or both made to him.

Section 2 (62) “registered person” means a person who is registered under section 25 but does not include a person having a Unique Identity Number;

Section 25 (1) Every person who is liable to be registered under section 22 or section 24 shall apply for registration in every such State or Union territory in which he is so liable within thirty days from the date on which he becomes liable to registration, in such manner and subject to such conditions as may be prescribed:

It is evident from the above legal provisions, a person will become registered person in a particular state only if he has taken registration in that state. Otherwise he will treated as an unregistered person.

And as all knows, unregistered person can not avail ITC

[KASTURI SETHI]

Section 2(85) “place of business” includes -

(a) a place from where the business is ordinarily carried on, and includes a warehouse, a godown or any other place where a taxable person stores his goods, supplies or receives goods or services or both; or

(b) a place where a taxable person maintains his books of account; or

(c) a place where a taxable person is engaged in business through an agent, by whatever name called;

Above options can be availed for the purpose of registration.