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ITC - Courier Service

06 April 2019

Dear Respected,

can anyone please help me to understand the eligibility of ITC on courier service when its place of service is outside India.
for example we used to send courier from India to outside India. where courier service charged Igst, since the place of supply is other territory.
can we claim ITC?

Thanks and regards
Nadeem

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14 Replies

Priya Kashyap (Student) (7053 Points)
Replied 06 April 2019

courier service no GST charged charge
exemption

1 Like

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Priya Kashyap (Student) (7053 Points)
Replied 06 April 2019

but any export of goods where freight levied is exempt under serial number 19A and 19B

Priya Kashyap (Student) (7053 Points)
Replied 06 April 2019

courier through vessel and airway

Mohd Nadeem (130 Points)
Replied 06 April 2019

Suppose , blue dart is service provider

Priya Kashyap (Student) (7053 Points)
Replied 06 April 2019

no not taxable

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Mohd Nadeem (130 Points)
Replied 06 April 2019

I understand it is taxable, but the question is, if we can claim ITC? Since place of supply of service is other territory.

1 Like

Pankaj Rawat (GST Practitioner) (55052 Points)
Replied 06 April 2019

As per the proviso inserted in Amendment Act 32 of 2018 , & the same was effective by Notification 1/2019 IGST Act

"Provided that where the transportation of goods is to a place outside India,
the place of supply shall be the place of destination of such goods.".

Hence the Courier company is liable to charge IGST , even though the sender (Supplier) is same state , & you cant avail ITC on same .

But .....

In this regard, we can hope clarification from the Board otherwise there will be problem regarding determination of place of supply which may further create confusion in availing ITC whether on CGST/SGST or IGST. Sooner the clarification, less the problems for assessees.

N@deem (ARTICLESHIP TRIANEE) (29 Points)
Replied 10 April 2019

Thanks Pankaj Ji!!

1 Like

CA Akshay Hiregange (Partner - Audit & Assistance) (4615 Points)
Replied 10 April 2019

Dear Nadeem,

I agree with Mr. Pankaj.

Prior to the amendment act, in the recommendations, such services wherein the destination of goods was outside India - was supposed to be considered as export of services. Although, based on the amendment made, and due to restrictions in the export of service definition the liability was cast on the supplier as IGST other territory.

The possibility of rebuttal against ITC claim is that - ITC is available in the course or furtherance of business. Business is understood to be undertaken in such state. Therefore, ITC should be eligible wherein POS is such state and not other territory.

Hopefully, this anamoly in the law is rectified soon.

1 Like

N@deem (ARTICLESHIP TRIANEE) (29 Points)
Replied 10 April 2019

Thank you so much to add your comment!

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Pankaj Rawat (GST Practitioner) (55052 Points)
Replied 16 April 2019

Yes I agree with CA Akshay Hiirengange , that ITC can avail but ...clarification from govt is awaited in this regard.

Suresh (Accountant) (31 Points)
Replied 29 September 2019

any one update on the same

Mohd Nadeem (130 Points)
Replied 29 September 2019

I think we should claim, as the services used for furtherance of business

Vasisa (Designer) (22 Points)
Replied 28 February 2020

Although ITС is considered a large Indian courier service, they were very negligent in transporting my goods. When Uber or any other service appeared in mobile applications, I realized that this is the future. Now, as I call a taxi, I can also call a courier service at the touch of a button.