itc

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tinku (Querist)
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04 July 2017 If i am purchase a vessel for coastal cargo movement, 5% gst applicable on the CIF value. whether i can avail Input Tax Credit from the above paid GST

tinku

tinku (Querist)
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04 July 2017 Am i cliam itc on tax(5%) paid for transportation as friegt charges

tinku

tinku (Querist)
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04 July 2017 Thanks in advance

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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02 August 2024 Yes, you can claim Input Tax Credit (ITC) on the GST paid for the purchase of a vessel for coastal cargo movement and on the GST paid for transportation as freight charges, subject to certain conditions. Here's a detailed breakdown:

### 1. **ITC on Purchase of Vessel for Coastal Cargo Movement**

- **GST Rate:** As you mentioned, the GST rate is 5% on the CIF (Cost, Insurance, and Freight) value of the vessel.
- **Eligibility for ITC:** You can avail ITC on the GST paid for the purchase of the vessel if the vessel is used for business purposes and is engaged in the transportation of goods. The vessel needs to be used in the course of or in furtherance of your business.
- **Documentation Required:** Ensure you have a valid tax invoice from the supplier of the vessel, and the invoice should clearly show the GST charged.

### 2. **ITC on Freight Charges (Transportation)**

- **GST Rate on Freight Charges:** Freight charges for coastal and intra-state transportation may attract GST, and you can claim ITC on the GST paid on these charges.
- **Eligibility for ITC:** ITC can be claimed on freight charges if the transportation is related to the movement of goods for business purposes. This includes freight charges for the transportation of goods either within or outside the state.
- **Documentation Required:** You need to maintain proper documentation including the tax invoice for the freight charges, which should detail the GST amount charged.

### General Conditions for Claiming ITC

To claim ITC, you need to ensure the following:

1. **Validity of Tax Invoice:** The tax invoice or other prescribed documents must be valid and contain all the necessary details including GSTIN of the supplier, GSTIN of the recipient, and the GST amount.
2. **Use of Goods and Services:** The goods or services on which ITC is claimed must be used for the business and should not be used for personal purposes.
3. **GST Returns:** The ITC should be reflected in the GST returns of the supplier and the details should be correctly entered in your GST returns.
4. **No Blocked Credit:** Ensure that the ITC on the specific item or service is not blocked under the GST law. Certain items or services are blocked from ITC claims as per the GST provisions.

### Summary

- **Vessel Purchase:** You can claim ITC on the 5% GST paid on the CIF value of the vessel if it is used for business purposes.
- **Freight Charges:** You can claim ITC on the GST paid on freight charges if the transportation is for business purposes.

For specific scenarios and to ensure compliance with the GST provisions, you might want to consult a tax professional or GST consultant who can provide tailored advice based on your business needs.