TaxTMI 
TaxTMI 
GST Credit appearing as Ineligble in Bill To -Ship To Transactions
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....ST Credit appearing as Ineligble in Bill To -Ship To Transactions<br> Query (Issue) Started By: - Sachin Mohite Dated:- 30-10-2017 Last Reply Date:- 5-11-2017 Goods and Services Tax - GST<br>Got 9 Replies<br>GST<br>Dear Sir/ Madam, One of our client (A) of Maharashtra Supplied Material to (C) of Gujarat on the instruction of his customer (B) at Maharashtra. Consideration is paid by B to A and B f....
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....urther raised invoice to C. A has applied IGST, as material moving outside Maharashtra, in its Invoice to B as per Section 7 of IGST and accordingly uploaded Return showing Place of Supply as Gujarat. However in GSTR 2 of B on Portal, said invoice is appearing but showing ineligible for tax credit to B.Since apply of IGST by A is as per provisions of IGST, B should get the Credit of the same. Q....
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....uery : How this technical problem can be solved so that B will get the credit for the same as everything all data on portal is freezed for said transaction. Reply By prakash kumar: The Reply: Place of Supply as per Sec 10(1) (b) of IGST act will be Maharastra. You can rectify such through GSTR 2, which supplier need to accept through GSTR 1A. Reply By Sachin Mohite: The Reply: Thanks Prakash ....
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....Sir for your reply, In GSTR 2 , field of POS is freezed and could not be changed at Our end. Further if POS is Maharashtra , IGST could not be applied. Since Material is actually being moving to Gujarat , IGST is applicable. Facing lot of difficulties to get the Credit due to such restrictions in Software Developed for GST. Reply By MUKUND THAKKAR: The Reply: Where is B is located ? Reply By....
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.... Sachin Mohite: The Reply: B is Located in Maharashtra Reply By MARIAPPAN GOVINDARAJAN: The Reply: You can approach the Helpdesk. Reply By MUKUND THAKKAR: The Reply: if you are loacated in Maharashtra and supplier A is also Maharashtra in transcation is Bill to Ship to than your supplier should be charge only CGST and SGST not IGST. please makes necessary correction in GSTR-2 by adding invoic....
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....e mode and rectify mistakes. Reply By Ganeshan Kalyani: The Reply: Place of supply is that place where invoice is raised. Here invoice is raised within the State. Hence CGST , SGST will be applicable. Reply By Sachin Mohite: The Reply: Dear Sirs Thanks to all for your comments. However all comments received on my query are appears to be by invoking Section 10(1)(b) of IGST Act. Relevant wor....
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....dings of the said provision are as follows - 'where goods are delivered by the supplier to recipient or any other person on the direction of a third person … it shall be deemed that the said third person has received the goods and place of supply of such goods shall be the principal place of business of such person.' Following is the sequence of Ship to Bill to Transactions in our Query -....
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.... A(Maharashtra) -----> Invoice to B (Maharashtra)-----> Invoice to C(Gujarat) (1st Persons) (2nd Person) (3rd Person) Material Shipped by A to C at the Instruction of B. Original Contract is between A & B. Thus in the said contract B is the 2nd Person and C will be the third person. In Invoice by A to B IGST is charged and also in invoice by B to C IGST is charged. In our case material is de....
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....livered at the instruction of 2nd Person (B) only and not at the instruction of 3rd Person (C). Thus Section 10(1)(b) can not be invoked in our case as in our opinion Section 10(1)(a) squarely apply and attract IGST for Invoice to B by A [ as per Section 7 read with section 10(1)(a) ] since the material is moving out of Maharashtra and the movement of goods terminate at Gujarat. As per Section 20....
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.... of IGST Act, for Input Tax Credit, Provisions of CGST Act will apply. Further as per Section 16 of CGST Act, condition for claiming Input Tax Credit is as follows Section 16(2)(b) : Person has received the goods Explanation.- For the purpose of this clause, it shall be deemed that the registered person has received the goods where the goods are delivered by the supplier to a recipient 'on the D....
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....irection of Such Registered Person', before or during the movement of such goods. Thus 16(2)(b) refers to On the Direction of Registered person (and not third person). Thus in our case B( at Maharashtra) is the Registered Person and entitled to claim credit as goods are moving at his direction and it is deemed that he has received the goods. It appears to be hitch in Portal by stating transactio....
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....n as ineligible for credit to B by applying lock on claiming credit by B (of Maharashtra) for IGST charged by A(of Maharashtra). However by plain reading of provisions of IGST & CGST Act, such lock appears to be not as per the provisions of the Act and undue hardship to the tax payer. Reply By Ganeshan Kalyani: The Reply: Sir place of supply is Maharashtra and supplier is also in Maharashtra. Th....
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....erefore it is local sale and CGST + SGST will be applicable.<br> Discussion Forum - Knowledge Sharing ....