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Ca shoes

Shivani (Learner) (1881 Points)

07 June 2018

I guess you must be wondering what the message title is all about

Mr. X a CA registered under GST buys a pair of shoes and pays GST.

Can he claim its Input Credit under GST if he gave his GSTIN at the time of purchase?

CA says that the shoes are for business purpose as I cant go to work without wearing them !

Regards

Shivani

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17 Replies

CA Naveen Chand (Chartered Accountant) (12729 Points)
Replied 07 June 2018

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subhagan sreerangam (7040 Points)
Replied 07 June 2018

likes

Sundararajan S (Final Student of ICAI) (1764 Points)
Replied 07 June 2018

No, he cannot. The law says only "in the course or furtherance of business" and not for business purpose.

Vinod Babu (24191 Points)
Replied 07 June 2018

What a 😄question?
No. He cannot claim ITC.

Shivani (Learner) (1881 Points)
Replied 08 June 2018

okay guys

now that all of you are done making fun of the question, its infact an existing problem.

I know for sure people who buy everything they can in their business name and use the purchases for personal use. the ACs are never taken to business premises but to bedrooms and ITC claimed.

Now as far as my question is concerned many of you just replied by saying NO CA cant take ITC but no one gave reason for it.

How is it that the PC purchased by CA is eligible for ITC (used for CA practice) and not shoes.

How can u refute CA's argument that shoes are his business shoes?

please support your answer with relevant sections/rules/notifications and not by simple Yes or NO.

regards

shivani

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Sundararajan S (Final Student of ICAI) (1764 Points)
Replied 08 June 2018

Section 7,9, 16 of CGST Act,2017 are relevant sections

Shivani (Learner) (1881 Points)
Replied 09 June 2018

Dear Sundarajan

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.

So what makes you think that no credit will be allowed on shoes?

How is it that you say business clothing and shoes etc (which can easily run in thousands) are not entitled to ITC but a laptop can?

Regards

Sundararajan S (Final Student of ICAI) (1764 Points)
Replied 09 June 2018

Whether it runs to hundreds or thousands doesn't matter. It is only whether that particular inward supply contributes to the value addition. First of all, GST is a value added tax, where input tax credit on inward supplies of both goods and services can be availed and utilized. Shoes purchased by a CA can't be said as contributing to the value of services performed by him. For instance, filing of ordinary salary ITR may be charged at RS.1500 by him. 1500 is only for the work done by him. He may wear shoes, chappal, or a very pious CA may not wear any footwear inside office. Wearing of footwear is personal consumption. It doesn't contribute to the value of services performed by him. As regards clothing, if that particular clothing forms part of office furniture, yes he can.

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Vinod Babu (24191 Points)
Replied 09 June 2018

Yes. Nice answer sir.
I agree with Mr Sundarajan Sir.
CA uses the Laptop for providing services like IT filing, Gst filing and other services. He is receiving a amount for services rendered by him.
Without the help of laptop, he cant provide the services. So he can claim ITC for it but not for CA shoes. Here shoe is not contributing directly with CA service. No ITC claim for shoe. Because shoe, clothes is personal need of a person.

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Sundararajan S (Final Student of ICAI) (1764 Points)
Replied 09 June 2018

Section 17(5)(g) says credit is not available on goods used for personal consumption. See whatever is posted here may not satisfy you. These are tacit knowledge. If you want a very authoritative response better apply for advance ruling. Or if you don't want to take that route, not satisfied with these responses, still wish to take credit, please go ahead. If proper officer finds it erroneous, pay tax, interest @ 18 or 24% as per provisions of Section 50 and as per mind of officer. If you are not ready to pay, still against officer, proceed with appeal, we students or members will read it as case law to enrich our knowledge in future.

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Vinod Babu (24191 Points)
Replied 09 June 2018

👌👌👌

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vinodkumargupta (proprietor) (115 Points)
Replied 10 June 2018

What a question , tomorrow you would I have eaten food plus ice cream , I have paid GST on it , I want to get credit of it, The claimed expenditure should be furtherane of business,