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Gst input tax credit

Maitree (Employee) (76 Points)

22 June 2018

Hi,

A Bangalore IT service provider has charged CGST+SGST on the invoice as the services were provided by him in Bangalore but the billing address of the receiver is Mumbai and the payment shall also be done from Mumbai as there is no registered entity of the receiver in Bangalore.

I wanted to know whether Input tax credit shall be available on this Bangalore CGST+SGST to this Mumbai entity or no?

Please reply as soon as possible...

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7 Replies

Jatin (Accountant) (3479 Points)
Replied 22 June 2018

No, you can't avail ITC.

Which type of service provided by IT company to you ?

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CA Shivam Arora (Chartered Accountant) (2414 Points)
Replied 22 June 2018

In my opinion the Bangalore service provider should have charged IGST as per section 12(2) of IGST Act. Then you could have claimed whole ITC.

Maitree (Employee) (76 Points)
Replied 22 June 2018

Actually company's IT servers are located there. Therefore, the service is in the type of repairs and maintenance.

Maitree (Employee) (76 Points)
Replied 22 June 2018

Since, it is a performance based service, the place of supply becomes Bangalore and hence IT company has charged CGST+SGST in the invoice instead of IGST. So, can we claim inout tax credit for this transaction or no?

If no, then kindly explain the reason for the same...

CA Shivam Arora (Chartered Accountant) (2414 Points)
Replied 22 June 2018

Then I am sure IGST is to be charged since the supplier is in Bangalore and Place of supply is in Mumbai(location of recipient). Ask them to cross check the provision and revise the invoice.

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CA Shivam Arora (Chartered Accountant) (2414 Points)
Replied 22 June 2018

Originally posted by : Maitree
	Since, it is a performance based service, the place of supply becomes Bangalore and hence IT company has charged CGST+SGST in the invoice instead of IGST. So, can we claim inout tax credit for this transaction or no? If no, then kindly explain the reason for the same...

Section 12 which is applicable in your case, doesn't speak about any performance based service. Your case is not covered in sub section 3-14 and hence subsection 2 is applicable.

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