♠ To this end, we need to examine the ITC provisions of the CGST Act, Relevant Section is reproduced here:
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.
♠ After going through the Section 16(1) above, which allows credit of input tax to a registered person, subject to conditions and restrictions, it is necessary to know what Input Tax is. The term input tax has been defined in Section 2(62) which is also being reproduced for sake of convenience:-
“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 and includes—
♠ On perusal of the Section 2(62) as reproduced above, it becomes clear that the input tax inter alia is Central Tax charged on inward supply of a registered person.
♠ While Central tax, as per Section 2(21) of the CGST Act, 2017, means the Central Goods and Services Tax (Central GST) levied under Section 9.
♠ After going through the Section 9, we find that Section 9(1) is relevant to the instant matter. So we are reproducing the provisions of Section 9(1) of CGST Act for the sake of convenience:-
Subject to the provisions of sub-section (2), there shall be levied a tax called the central goods and services tax on all intra-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under section 15 and at such rates, not exceeding twenty per cent., as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person.
♠ Going through the above Section 9(1), we come across a phrase “Intra-State Supplies of Goods or Services”. Section 8(2) of the Integrated GST Act, 2017 define “intra-state supplies of Services’. This Section is being reproduced for the sake of convenience:-
Subject to the provisions of section 12, supply of services where the location of the supplier and the place of supply of services are in the same State or same Union territory shall be treated as intra-State supply:
Provided that the intra-State supply of services shall not include supply of services to or by a Special Economic Zone developer or a Special Economic Zone unit.
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