Input tax credit in GST

This query is : Resolved

AviGan (Querist)
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09 January 2020 Sir/Madam
Please clarify. I am registered in Delhi . Availed input services and paid bill for input services to Party registered in UP for providing services in UP. The party has charged CGST & SGST. Can I claim ITC of Input CGST And input SGST.

Thanks in Advance

JATIN DUGGAL

JATIN DUGGAL (Expert)
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11 January 2020 Your query is not complete, provide the nature of services availed in order to answer the same properly

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)
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01 August 2024 Yes, you can claim Input Tax Credit (ITC) for CGST and SGST on input services even if the services are provided by a party registered in a different state (UP) and you are registered in Delhi. Here's how it works under the GST regime:

### **1. **Eligibility for Input Tax Credit (ITC)**

Under GST, ITC can be claimed for taxes paid on input services used in the course or furtherance of business, regardless of the location of the supplier.

### **2. **Claiming ITC for CGST and SGST**

1. **Supplier's State vs. Recipient's State:**
- The supplier (in this case, registered in UP) has charged CGST and SGST because the place of supply for the services is UP.
- As the recipient, your GST registration is in Delhi, which means the place of supply rule applies for determining the appropriate GST treatment.

2. **Cross-State Services:**
- For cross-state services (inter-state services), the supplier should charge IGST instead of CGST and SGST.
- Since CGST and SGST were charged, this could indicate an issue with how the supplier has billed you.

### **3. **ITC Claim Process**

1. **Check the Invoice:**
- Ensure that the invoice from the supplier meets all GST compliance requirements and clearly shows the CGST and SGST amounts charged.

2. **Input Tax Credit Availability:**
- **ITC on CGST and SGST:** You should verify whether the ITC on CGST and SGST is available and correctly reflected in your GST returns. Normally, for inter-state transactions, IGST would be charged and ITC would be claimed accordingly.

3. **ITC Eligibility:**
- Ensure the services are used for business purposes and not specifically excluded from ITC under GST provisions.

### **4. **Potential Issues and Actions**

1. **Supplier Error:**
- If the supplier incorrectly charged CGST and SGST for an inter-state supply, this might need to be rectified. The supplier should issue a revised invoice with IGST.

2. **Rectification Process:**
- Request the supplier to issue a credit note or a revised invoice with IGST and obtain a refund or adjustment from the supplier if required.

### **5. **Filing GST Returns**

- **GST Return Filing:** Ensure that you correctly input the details of the invoice in your GST returns. The system should reflect your claim of ITC based on the invoices and credit notes.

### **6. **Consultation**

- **Consult a Tax Professional:** Given the complexities and potential errors in invoicing, it is advisable to consult a GST professional or tax consultant to ensure proper compliance and correct any discrepancies.

### **Summary**

- **Yes, you can claim ITC for CGST and SGST,** but ensure that the services were correctly billed. Typically, for inter-state services, IGST is preferred. If CGST and SGST were mistakenly charged, the supplier should correct this.

Ensure you follow up with the supplier for any corrections needed and maintain accurate records of your ITC claims.

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