13 May 2019
Sir I want to Know that should a registered mobile retail shop keeper will have to claim the ITC shown in GSTR-2A in his GSTR-3B. relating to Mobile Recharge voucher & Bajaj Finance. Since mobile Shop Keeper have not purchased any thing from Bajaj Finance he has just sold mobile to customer through Bajaj Finance and got Tax Invoice from Bajaj Finance in which written as "Subvention Income" & GST levied on Taxable Amount. In Case of Mobile Recharge when he getting recharge Balance say of Rs. 100/-, he has to pay Rs. 97/-, Rs. 3/- is his income which he has to less pay to Company. Thereafter when he recharge to Customer, he receives Rs. 100/-. The recharge Co. & Bajaj Finance reflected this transaction GSTR-2A and ITC their on. Now my question is will I have to Claim these ITC shown in GSTR-2A? If Yes, how I will treat These ITC in my GST Return ?. Will I have to add Recharge Amount with Gross Turnover with Mobile Sale ? If Yes, then In Income Tax I have to Calculate Profit U/s 44AD @ 8% of Gross sale which will be not justified. Thereafter I have to also show Purchase & Sale of Recharge Voucher with same Amount & have to declare Profit @8% which will be unjustified. I have to also show sale Recharge in GSTR-1. Sir please Resolve my Query.
13 May 2019
Firstly get clear that you want to claim ITC then there is no need to show anything in GSTR-1 . Amount of ITC can be claimed by you in GSTR-3B in All other ITC
02 August 2024
To address your query regarding the ITC (Input Tax Credit) treatment of mobile recharge vouchers and transactions with Bajaj Finance, let's break down the situation and clarify the treatment in GST returns:
### **1. ITC Treatment of Mobile Recharge Vouchers**
**Nature of the Transaction:** - **Recharge Vouchers:** In your case, when a mobile retailer receives recharge vouchers, they pay Rs. 97 for a voucher worth Rs. 100. The Rs. 3 is treated as the retailer’s income, and GST is applied on this income.
**ITC Eligibility and Reporting:**
- **ITC on Recharge Vouchers:** Generally, ITC is not available on the purchase of mobile recharge vouchers because they are considered to be goods/services where input tax credit is not eligible as per GST laws. The GST Act specifies that ITC cannot be claimed on certain supplies, including the purchase of vouchers or stamps.
- **Treatment in GSTR-3B:** - **Do Not Claim ITC:** You should not claim ITC for the amount related to the purchase of mobile recharge vouchers as the credit on such items is typically not available. - **Reporting in GSTR-3B:** Do not include the recharge amount (e.g., Rs. 97) in your GSTR-3B as a claim for ITC. You should report your gross turnover from the sale of mobile handsets and any other sales as per normal reporting.
### **2. ITC on Bajaj Finance Transactions**
**Nature of the Transaction:** - **Bajaj Finance Transactions:** If you receive a tax invoice from Bajaj Finance for "Subvention Income" with GST levied on it, this income is usually a financial incentive or support provided by Bajaj Finance for facilitating sales.
**ITC Eligibility and Reporting:**
- **ITC on Subvention Income:** - **Check ITC Eligibility:** For subvention income, you need to check whether the GST charged by Bajaj Finance on the subvention is eligible for ITC. This typically depends on the nature of the service provided and the specific GST provisions. - **If ITC is Available:** If Bajaj Finance's invoice includes GST that qualifies for ITC and you are eligible to claim it, then you should include this ITC in your GSTR-3B.
- **Reporting in GSTR-3B:** - **Claim ITC:** Include the eligible ITC from Bajaj Finance in your GSTR-3B under the relevant ITC section. - **Ensure Accuracy:** Ensure that you are only claiming ITC for amounts where the GST is eligible under the GST laws.
### **3. Impact on Turnover and Income Tax:**
- **Turnover Reporting:** - **Recharge Vouchers:** The sale of recharge vouchers should not be included in your gross turnover for GST purposes, as it does not affect the taxable supply. - **Sales:** Report your actual sales of mobile handsets and any related income accurately.
- **Income Tax Considerations:** - **GST Impact:** Income from the sale of recharge vouchers and any subvention income should be reported based on the actual transactions and GST treatment. Ensure that the accounting reflects actual business transactions and not inflated figures due to incorrect inclusion of non-business transactions.
### **4. Summary of Actions:**
1. **Mobile Recharge Vouchers:** - **Do Not Claim ITC** on purchase of recharge vouchers. - **Do Not Include** recharge voucher amounts in GSTR-3B as ITC.
2. **Bajaj Finance Transactions:** - **Verify ITC Eligibility** on GST charged by Bajaj Finance. - **Claim ITC** if eligible and report accurately in GSTR-3B.
3. **Income Tax Reporting:** - **Report actual sales and income** accurately, excluding non-business transactions like recharge vouchers.
### **Recommendation:**
For precise guidance and to ensure compliance with GST and Income Tax regulations, it is advisable to consult with a GST consultant or tax professional. They can provide tailored advice based on your specific transactions and ensure that your GST and income tax filings are accurate.
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