Q. Whether the Input Tax Credit of Central Tax Paid in Haryana be Available to the Applicant who is Registered in Rajasthan State?

♠ To this end, we need to examine the ITC provisions of the CGST Act, Relevant Section is reproduced here:

Section 16(1):-

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:-

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 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:-

Section 9(1)

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:-

Section 8(2)

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.

CONCLUSIONS

  • From above we find that credit of input tax is admissible to a registered person, subject to conditions and restrictions, and input tax inter alia is Central tax charged on inward supply of a registered person.
  • Going further, Central tax is Central GST levied under Section 9 of the CGST Act. After going through the Section 9(1) above, we find that the Central GST is a tax levied on all intra-state supplies of goods or services both —.
  • Going ahead, Intra-state supply of service, as per Section 8(2) of the Integrated Tax Act, 2017 means supply of services where the location of the supplier and place of supply of services are in the same state.
  • Thus crux of the matter is that for a person registered in Rajasthan, Central GST or Central tax is a tax levied under Section 9 ibid on supplies having both location of the supplier and place of supply in Rajasthan.
  • At this point it becomes absolutely clear that ITC of the Central GST or Central tax would be available to a person registered in Rajasthan if the location of the supplier and place of supply of the services are in Rajasthan
  • In other words, ITC of the Central tax charged in Haryana is not available as in this case both the location of the supplier and the place of supply of the services are in the State of Haryana.

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DISCLAIMER

The information cited in this article has been drawn from various provision of The CGST Act, Rules, provisions and other various sources. While every effort has been made to keep, the information cited in this article error free, team GSTCORNOR does not take the responsibility for any typographical or clerical error which may have crept in while compiling the information provided in this article.We disclaim all liability in respect to actions taken or not taken based on any or all the contents of this article to the fullest extent permitted by law. Do not act or refrain from acting upon this information without seeking professional legal counsel.

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7 Comments

  1. AkshayH says:

    IN RE: M/S. IMF COGNITIVE TECHNOLOGY (P) LTD., JAIPUR

    Input tax credit – Central Tax paid in Haryana – Applicant registered in Rajasthan State – Territorial Jurisdiction – location and place of supply – Challenge to AAR decision – HELD THAT:- The credit of input tax is admissible to a registered person, subject to conditions and restrictions, and input taxinter alia is Central tax charged on inward supply of a registered person. Going further, Central tax is Central GST levied under Section 9 of the CGST Act. After going through the Section 9(1), it is found that the Central GST is a tax levied on all intra-State supplies of goods or services or both Going ahead, Intra-state supply of service, as per Section 8(2) of the Integrated GST Act, 2017 means supply of services where the location of the supplier and place of supply of services are in the same State.

    Thus crux of the matter is that for a person registered in Rajasthan, Central GST or Central tax is a tax levied under Section 9 ibid on supplies having both location of the supplier and place of supply in Rajasthan. At this point it becomes absolutely clear that ITC of the Central GST or Central tax would be available to a person registered in Rajasthan if the location of the supplier and place of supply of the services are in Rajasthan.

    Thus, ITC of the Central tax charged from the Appellant in Haryana is not available to them as in this case both the location of the supplier and place of supply of the services are in the State of Haryana.

    AAR ruling upheld – appeal dismissed.

    No.- Order No. RAJ./AAAR/01/2019-20

  2. Vinod says:

    Given Facts

    Location of Supplier and place of supply is in HARYANA
    and the Recipient is from Rajastan and he is a registered person in Rajasatn

    Supplier will charge CGST & SGST as per place of supply.
    When Supplier files GSTR 1 he should mention supply details in B2C as Recipient is unregistered in HARYANA
    If Supplier includes in B2B and select place of Supply as HARYANA, Recipient will be getting input in GSTR 2A.

    But in Actual it is B2C so therefore NO ITC Shall be Availiable and even though its appearing in GSTR 2A it should not be taken in GSTR 3B.

    Please correct me if i am wrong

    thanks

  3. San says:

    The question is odd and so is the conclusion.
    Q. Whether the Input Tax Credit of Central Tax Paid in Haryana be Available to the Applicant who is Registered in Rajasthan State?
    As per the question supply is at Rajasthan and supplier is at Haryana. GST being a destination based tax, the supply is inter-state. As such tax to be paid is IGST & SGST. The article confuses the point of supply and meaning of intra-state and inter-state and wrongly concludes ITC is ineligible. Tax GuRu kindly avoid such nonsensical articles. Tax payers are mired with so much issues related to Return filing and ITC, why create another unwarranted controversy.

  4. vipin kutumbale says:

    CGST act says credit relating to any state can be clamed. But Almost all STATE GST act says credit relating to the STATE and therefore SG CAN OT BE CLAIM

  5. vswami says:

    IMProMptu

    “In other words, ITC of the Central tax charged in Haryana is not available as in this case both the location of the supplier and the place of supply of the services are in the State of Haryana.”

    Prima facie sounds odd and ridiculous; needs a closer study.

    Seems to fly in the teeth of the very objective openly proclaimed ,- that GST is a ‘ONE TAX ‘ for the ‘ONE NATION’- (the UNION of FEDERAL STATES – Haryana could be no exception or odd state out !)

    Seems . to be one of the host of the provisions which must go back to the ‘drawing board ‘ of the bureaucrats , who have been the architects of the law heavy flawed in experts’ circles ?!
    Levy of GST is inseparable from the ITC in relation thereto, a vital limb of it ?!?!.
    See what the Fin Panel Chief had to say over the media !

    courtesy

  6. satish sarda says:

    Section 9(1)

    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.:
    definition is not state specific. It is a general definition of CGST . In my opinion credit should be allowed.

  7. YESHU JAIN says:

    I think, ITC of CGST shall be available , irrespective of facts that whether it will charged by supplier located in same state or other state. As the Central GST charged by supplier located in different states lvied as per CGST Act, 2017.

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