IGST on Courier Bill

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Aryan (Querist)
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24 January 2024 Dear Expert

I have an query: our courier company issued bills from Delhi to Delhi, and IGST was charged on a POS basis; my question is if we can claim this ITC or not.

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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09 July 2024 If your courier company issued bills from Delhi to Delhi and charged IGST (Integrated Goods and Services Tax) on a Point of Sale (POS) basis, here's how Input Tax Credit (ITC) can generally be claimed:

1. **Nature of Supply:** According to GST rules, interstate supplies (from one state to another) attract IGST. In your case, since the supply is from Delhi to Delhi, it would typically be considered an intrastate supply if both the origin and destination are within the same state (Delhi in this instance).

2. **POS Basis:** POS (Place of Supply) determines whether CGST (Central GST) + SGST (State GST) or IGST is applicable. For intrastate supplies, CGST + SGST apply. If IGST has been charged incorrectly based on POS, it might indicate an error in billing.

3. **ITC Eligibility:**
- **Correct Billing:** If IGST was mistakenly charged on an intrastate supply (Delhi to Delhi), it's essential to rectify this with your courier company to issue correct invoices with CGST + SGST.
- **ITC Claim:** Generally, ITC can only be claimed for taxes correctly charged and paid on eligible supplies. If IGST was charged incorrectly on intrastate supplies, the recipient cannot claim ITC on such taxes because IGST is not applicable for intrastate transactions.

4. **Rectification Steps:**
- Contact your courier company and request corrected invoices showing CGST + SGST instead of IGST for intrastate supplies within Delhi.
- Ensure compliance with GST regulations to avoid complications in ITC claims and audits.

5. **Consultation:** For specific advice tailored to your situation, especially regarding any potential consequences or rectification steps, consulting with a GST practitioner or tax advisor would be advisable.

In summary, if IGST was incorrectly charged on intrastate supplies (Delhi to Delhi), you typically cannot claim ITC on such taxes. Rectification with correct invoices (CGST + SGST) is necessary for compliance with GST laws.

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