ITC Claim of sale versus purchase -
This query is : Resolved
24 January 2025
A & B are in the same of line of construction. A gives contract to B to build an apartment. 'A' also SELLS the material worth 200 lacs to B and B pays the amount.
So it is B2B transaction. By selling the goods, A also transfer the ITC worth 40 lacs to B. For B it is Purchase Tax ITC. B completed the construction and raises bill on main Contractor A for Rs.300 Lacs + GST @ 18%. Whether the ITC in the credit of 'B' of around 40 lacs (having purchased from 'A') can be claimed to OFF-SET the sale invoice raised on 'A'. Whether such a claim is okay ? By adjusting the sales including GST @ 18% can be adjusted against ITC available to the credit of 'B' ?
DONE
So it is B2B transaction. By selling the goods, A also transfer the ITC worth 40 lacs to B. For B it is Purchase Tax ITC. B completed the construction and raises bill on main Contractor A for Rs.300 Lacs + GST @ 18%. Whether the ITC in the credit of 'B' of around 40 lacs (having purchased from 'A') can be claimed to OFF-SET the sale invoice raised on 'A'. Whether such a claim is okay ? By adjusting the sales including GST @ 18% can be adjusted against ITC available to the credit of 'B' ?
DONE
24 January 2025
Can you clarify how B purchases ITC from A?
A sells the material and charges GST over the material, which is transferred to treasury. B have to credit A's account with the invoice including GST. This GST (ITC) can be claimed by B while paying GST to treasury.
A sells the material and charges GST over the material, which is transferred to treasury. B have to credit A's account with the invoice including GST. This GST (ITC) can be claimed by B while paying GST to treasury.
24 January 2025
'B' being a builder has lots of stock-on-hand for which he had already paid GST. There was no sales in 'A's account while the ITC remained a credit of 40 lacs. Now he is selling the same goods to 'B' charging 18% GST. Since he has ITC worth 40 lakhs in his account get the adjust the same towards sale of goods to 'B'. Thus 'A's ITC get nil. 'B' having purchased the goods from 'A', the GST automtically shown as ITC in 'B' account. NOW, after completion of contracted construction, 'B' raises a bill for Rs.300 lakhs + GST @ 18% on 'A' towards the total cost of construction contracted amount. For 'B' it is sales while he has a credit of Rs.40 lacs ITC in his own account. Whether he can adjust the ITC in 'B' account and pay any differential amount to Treasury ? Whether it is okay.
24 January 2025
Yes, B has to pay only excess of GST after adjustment of ITC i.e. credit in GST account.
24 January 2025
'B' being a builder has lots of stock-on-hand for which he had already paid GST. There was no sales in 'A's account while the ITC remained a credit of 40 lacs. Now he is selling the same goods to 'B' charging 18% GST. Since he has ITC worth 40 lakhs in his account get the adjust the same towards sale of goods to 'B'. Thus 'A's ITC get nil. 'B' having purchased the goods from 'A', the GST automtically shown as ITC in 'B' account. NOW, after completion of contracted construction, 'B' raises a bill for Rs.300 lakhs + GST @ 18% on 'A' towards the total cost of construction contracted amount. For 'B' it is sales while he has a credit of Rs.40 lacs ITC in his own account. Whether he can adjust the ITC in 'B' account and pay any differential amount to Treasury ? Whether it is okay.
24 January 2025
Yes, it is okay.
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