TMI BlogIGST on Customer Consgined item for production purposeX X X X Extracts X X X X X X X X Extracts X X X X ..... Dear All, Overseas customer wants to send few specific components (FOC) to our production unit and wants us to integrate the components into the final product. The final product will be exported to him . In this scenario, we will have to pay IGST at the time of import. This is clear. The question is whether the importer can avail the ITC. As per section, serial # 2D of section 16 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GST act, ITC is not eligible if the payment is not made to the supplier. Since we are not going to make the payment to the supplier as the components are supplied free of cost. Please clarify in this scenario, can we avail the ITC or not. regards Saravanan. - Reply By KASTURI SETHI - The Reply = For availing and utilisation of Credit, there are two basic conditions. Duty must be paid a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd must be utilised in the business or in furtherance of business while paying tax. Both the conditions are to fulfilled. You qualify only second condition. Hence ITC is not allowed. - Reply By MistralSolutionsPrivateLimited - The Reply = Dear Kasturi Sir, We qualify 1st condition also as the consignment is cleared on payment of Duty. My question is can we avail the input on the duty amount (I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GST) though the shipment value is not payable to the supplier as the shipment is on FOC basis. As per section, serial # 2D of section 16 of GST act, ITC is not eligible if the payment is not made to the supplier. Since we are not going to make the payment to the supplier as the components are supplied free of cost. Please clarify in this scenario, can we avail the ITC or not. - Reply By KAST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... URI SETHI - The Reply = You will do assembling which is manfacturing process. How will you arrive at correct transactional value for the purpose of payment of GST ? May be for the purpose of export. Full value of goods including IGST to be paid, if you want ITC. This is my view. I would like oher experts to intervene. - Reply By Susheel Gupta - The Reply = Dear Sir IGST on import is paid on r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... everse charge basis. condition of payment to supplier is not their when tax is to be paid on RCM basis. You can take the ITC. Regards CA Susheel Gupta 9811004443 - IGST on Customer Consgined item for production purpose - Query Started By: - MistralSolutionsPrivateLimited Dated:- 11-4-2018 Goods and Services Tax - GST - Got 4 Replies - GST - Discussion Forum - Knowledge Sharing, reply post b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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