ITC limitation On purchase of mobile

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This query is : Resolved

Quick Summary

ITC on mobile phones is generally allowed under Section 16 of CGST Act if used for business purposes. There is no specific restriction under Section 17(5). Hence, a company can claim ITC on mobile phones purchased for directors and employees if used for business and recorded properly.

Harvinder Singh

Harvinder Singh (Querist)

16 August 2022 Xyz Pvt Ltd has 2 directors.
They want to purchase 2 ihones for themselves and 2 more mobile for employees.

Can they claim ITC on all 4 phones?

Is there any limitation on claiming ITC on purchase of mobile phone?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

18 August 2022 Section 16 of CGST Act, clearly states that input tax credit can be taken of any good or service purchased for 'Furtherance of Business'. Section 17(5) is also not restricted input tax credit on purchase of Mobile phone. Thus, a taxpayer is eligible to take input tax credit on purchase of Mobile phone.

CA Puja Sharma

CA Puja Sharma (Expert)

18 August 2022 Yes ITC is eligible against the mobile phones if they are accounted for in the books of accounts of the company as capital expenditure and are used for business.

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