Telecom e recharge mobile prepaid dealer itc can claim on net purchase talktime
This query is : Resolved
20 March 2025
Sir
a individual person(gst registered) is selling prepaid talktime to retailer (mobile shopkeeper) and purchasing from telecome company through invoice which was genertaed by telecom company itself onbehalf of above INDIVIDUAL. After a month telecom company paid him commission on his purchase and SALE invoice also generated by that telecom company on that person behalf.
my query is
Above person can claim GST on behalf of PURCHASE? although company paid him commission only
TELECOM COMPANY IS ALSO ASKING FOR CHALLN WHICH WAS PAID AGAINST COMMISSION INCOME
If we should leave ITC which section ?
Regards
a individual person(gst registered) is selling prepaid talktime to retailer (mobile shopkeeper) and purchasing from telecome company through invoice which was genertaed by telecom company itself onbehalf of above INDIVIDUAL. After a month telecom company paid him commission on his purchase and SALE invoice also generated by that telecom company on that person behalf.
my query is
Above person can claim GST on behalf of PURCHASE? although company paid him commission only
TELECOM COMPANY IS ALSO ASKING FOR CHALLN WHICH WAS PAID AGAINST COMMISSION INCOME
If we should leave ITC which section ?
Regards
12 August 2025
Can the individual claim ITC (Input Tax Credit) on prepaid talktime purchase?
Short answer: No.
Detailed Explanation:
Prepaid Talktime is an Intangible Service, but classified as ‘exempt’ or ‘outside scope’ for ITC on resale:
As a telecom dealer/reseller, prepaid talktime is treated as an exempt supply or non-taxable supply.
You cannot claim ITC on prepaid talktime purchases because resale of prepaid talktime is considered exempt or non-taxable supply (as per GST law, ITC is not available on exempt supplies).
Commission Income and Related ITC:
The commission received by the individual is a taxable supply.
The telecom company may issue a challan for commission payment for GST compliance.
However, the commission income is considered output tax liability of the individual, and input credit can be claimed on expenses related to earning this commission if they are taxable supplies.
Regarding ITC on purchase invoices issued by telecom company:
The individual cannot claim ITC on purchase of prepaid talktime because it's an exempt/non-taxable supply.
ITC can be claimed only on taxable supplies used for business.
Relevant GST Sections:
Section 16(1) of CGST Act: ITC is allowed only on inputs and input services used in the course or furtherance of business, and that are taxable supplies.
Section 17(2): ITC is not available on exempt supplies (including resale of exempt services like prepaid talktime).
What should be done?
Do not claim ITC on prepaid talktime purchase.
Pay GST on commission income (output supply).
Maintain proper invoices/challans for commission transactions as per GST rules.
Short answer: No.
Detailed Explanation:
Prepaid Talktime is an Intangible Service, but classified as ‘exempt’ or ‘outside scope’ for ITC on resale:
As a telecom dealer/reseller, prepaid talktime is treated as an exempt supply or non-taxable supply.
You cannot claim ITC on prepaid talktime purchases because resale of prepaid talktime is considered exempt or non-taxable supply (as per GST law, ITC is not available on exempt supplies).
Commission Income and Related ITC:
The commission received by the individual is a taxable supply.
The telecom company may issue a challan for commission payment for GST compliance.
However, the commission income is considered output tax liability of the individual, and input credit can be claimed on expenses related to earning this commission if they are taxable supplies.
Regarding ITC on purchase invoices issued by telecom company:
The individual cannot claim ITC on purchase of prepaid talktime because it's an exempt/non-taxable supply.
ITC can be claimed only on taxable supplies used for business.
Relevant GST Sections:
Section 16(1) of CGST Act: ITC is allowed only on inputs and input services used in the course or furtherance of business, and that are taxable supplies.
Section 17(2): ITC is not available on exempt supplies (including resale of exempt services like prepaid talktime).
What should be done?
Do not claim ITC on prepaid talktime purchase.
Pay GST on commission income (output supply).
Maintain proper invoices/challans for commission transactions as per GST rules.
12 August 2025
Sir! Thanks a lot for your kind advise
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Itr 1 processing
- Off Market debit and credit transaction
- Showing Gift from relative in ITR for this year
- Reporting Income under Section 44ADA
- Form 10E u/s 89(1). Need clarification because experts opinions differ !!!!
- ITR 2 Short Term gain & Long term gain
- INCOME TAX ON REDEVELOPEMENT OF FLAT
- ITR selection for salaries and capital gain less than L
- ITR 1: Details for showing Exempt Income
- Short Term Capital gain on shares bought and sold after 2018 onwards
- Gst invoice numbering and delivery challan numbering
- Sales amount in Gstr1
- E Commerce GSTR1 & 3B how to file
- GST Cancellation without jurisdiction
- Legal Opinion on Registrar's Refusal to Investigate a Society for Non-Renewal and Non-Compliance
- GST Refund_RFD-01
- Form10BD was uploaded successfully without any Error but after 24 hours, Form10BE are not available
- Annexure B utility for GST Refund
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
