Input tax credit

ITC / Input 188 views 5 replies

Shivani

Learner

1881 Points Joined December 2012

Dear Friends

X Ltd. has Head Office in Delhi and a Factory in Noida.

Since goods are manufactured and supplied out from factory, it is mandatory for X Ltd. to take registration in Uttar Pradesh (assuming it exceeds threshold limit of Rs. 20 lakh).

X Ltd. has thus taken GST registration in Uttar Pradesh.

Now X Ltd. pays rent of Rs. 3 Lakh per month for its Head Office In Delhi, thus attracting GST.

It wants to take credit of this GST paid on rent.

My question is how should billing take place and how can X Ltd. take credit of the GST paid on rent?

Regards

shivani

Replies (5)

Surjeet Negi

947 Points Joined March 2018

in such you may cross charge of the ITC scattered at HO and tsf relevant credit to UP location. refer rule 39 CGST rules 2017

RAJA P M

"Do the Right Thing...!!!"

128116 Points Joined January 2015

The ITC will be taken only in Delhi if have registered in Delhi...
Otherwise no way for ITC in Noida (U.P)...

Shivani

Learner

1881 Points Joined December 2012

Dear Raja Sir

So if a customer Z buys anything from X Ltd. then will supplier be the Factory and in invoice supplier address will be of factory?

and teh Input GST on rent at head office will be treated as an expense at HO?

regards

shivani

RAJA P M

"Do the Right Thing...!!!"

128116 Points Joined January 2015

* Yes... The Supplier address is Factory address if it's sale from Factory...

** As per Income Tax view the expense treated as PAN based...
As per GST the expense treated based on GSTIN...

Shivani

Learner

1881 Points Joined December 2012

Dear Raja Sir

It means that all those big corproate offices who are paying lakhs of rent per month but are making no supplies from HO will loose ITC of gst paid on rent?

Is it possible that factory may bill to HO but ship to customer so that HO can get Input IGST and then HO may raise invoice to customer.

THis way HO will get Input IGST from Branch along with its Input CGST and SGST on rent.

now branch can set off this input IGST, CGST and SGST against Output CGST, SGST from supplies made to customer.

Is it possible or am i missing something?

regards