CA Shruti Singhal
Quick Summary
The GST Council met for the 55th time under the Chairmanship of Honourable FM Nirmala Sitharaman. Some key changes were recommended regarding availability of ITC and date of availability of ITC. Let's discuss - 1. Clarification on availability of Input Tax Credit as per section 16(2)(b) of CGST A
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FAQ :
A clarification was issued stating that in Ex-Works contracts, where goods are delivered by the supplier to a transporter at the supplier's business location, the recipient (dealer) can claim ITC on these goods, provided other conditions are met.
Section 16(2)(b) of the CGST Act, 2017, relates to the conditions for the availability of Input Tax Credit, specifically concerning the 'receipt' of goods.
An amendment is proposed to replace 'Plant or Machinery' with 'Plant and Machinery' in Section 17(5)(d) of the CGST Act, with a retrospective effect from July 1, 2017.
The Supreme Court ruled that the explanation defining 'Plant and Machinery' in Section 17 does not apply to the term 'Plant or Machinery' in Section 17(5)(d), allowing ITC for certain immovable properties classified as 'plant' or 'machinery'.
The functionality test will ascertain if the immovable property was constructed to suit the assessee's special technical needs and if it is essential for carrying out the business activities.
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