Input credit on rcm

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This query is : Resolved

sumaiya Daruwala (Querist)

14 August 2017 My client is dealer in second hand goods(used Bottle)paying tax on margin basis
(rule 32(5))As per this rule goods purchased from urd dealer no tax is required to be paid under RCM. However if they purchase from reg dealer no input tax credit will be available for such purchases.
But dealer will be paying other expenses ie to contractors for washing bottle and putting them in gunny bags etc ,the payments are made to unregistered person,for which dealer will have to pay tax under RCM section 9(4).

My query is that what ever tax he is paying under RCM on various expenses can we get the settoff(itc will be available)

CA Suresh Jain

CA Suresh Jain (Expert)

14 August 2017 Your client is registered supplier or unregistered supplier?

sumaiya Daruwala

sumaiya Daruwala (Querist)

14 August 2017 my client is registered dealer sir

CA Suresh Jain

CA Suresh Jain (Expert)

15 August 2017 The input credit is restricted only on the second hand goods and not on other Supplies, your client is eligible for input credit on other supplies.

sumaiya Daruwala

sumaiya Daruwala (Querist)

16 August 2017 Thank you very very much.sir i have tried this question to various speaker but unable to get the answer.Thanks alot again

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