Services subject to reverse charge

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

19 December 2018 There is a Case in which there is a service provider (holding GST No.) whose services are subject to reverse charge say S1. The business also provide services which are not subject to reverse charge-say S2.
Query- Whether the service provider will get input tax credit on goods and services -which are received in providing the outward supply S1 and S2 both? or will it get input tax credit w.r.t only those services which are not subject to reverse charge i.e S2

CA Kamlesh Kukreja

CA Kamlesh Kukreja (Expert)
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19 December 2018 He can take credit of input services For Both S1 & S2 as even if RCM is applicable then also services will remain TAXABLE they will not be treated as EXEMPT.

Expert : Anonymous

Expert : Anonymous (Expert)

19 December 2018 No... He can't claim ITC for S1.

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Querist : Anonymous

Querist : Anonymous (Querist)

20 December 2018 There are 2 views:
1st view- ITC will not be available on input services as no output tax has been paid on it.Its not a taxable outward supply in hands of service provider.So service provider should not claim ITC on inward supplies taken w.r.t these services.

2nd view: Services provided in S1 were not exempt services.But taxable in hands of service receiver.As outward supply was not exempt....ITC Should be available.

therefore it became doubtful.