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Furtherance of business under gst how defined

Umesh V Naig (Statutory Analyst) (452 Points)

08 August 2017

Definition of " Furtherance of business " does this denote " purchase of Laptop / printer also considered " as furtherance of business but in actual

it is only used in the day to day working of the company.

However i argue since purchase of "Laptop " Printer every thing is used in the business and depreciation is also allowed which means that iam

using and there is no furtherance of business"

is that correct experts please

can i take Input credit on the purchase of Laptop etc

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10 Replies

Geetha Varadarajan (Ministry of finance) (180 Points)
Replied 08 August 2017

the phrase " furhterance of business" is not defined in the GST Act. this phrase has a wide meaning. what are the expenses in curred in relation to furthernace of business depends on the nature of the business as well as the nature of the expenditure in question. For example renovation of a building purchased may be for furherance of business for a real estate agent but the same may not be true for a manufacturere if his office or business is not situated in that building. however the purchase of laptop printer etc can be included in the category of expenese incurred for the furhterance of busines sif the same is p0urchased for use in office, plant ware house, sales office etc. If it is purchase d for the personal purpose of any director, officer or employee of the organistion then it cannot be called as that for furhternace of business . If you are utilising the lap trop printer etc for business purpoes then you can avail the input credit on the same.

4 Like

RAJA P M ("Do the Right Thing...!!!") (127140 Points)
Replied 08 August 2017

Yes. I fully agreed to Ms/Mrs. Geetha Varadarajan.....

RAJA P M ("Do the Right Thing...!!!") (127140 Points)
Replied 08 August 2017

Good Explanation Madam...

Geetha Varadarajan (Ministry of finance) (180 Points)
Replied 08 August 2017

thank you sir

Umesh V Naig (Statutory Analyst) (452 Points)
Replied 09 August 2017

Good explanation how the law is made without assigning very correct meaning of the word " Furtherance of business "

As you know what is agricultural income defined under law as anything grown on land is construed as Agri income at the same time

if it is grown on a sand pot or in fridge like mushroom etc it is not considered as agri income in definite law.

Hence more scope of reading in between lines will happen in future and refered to Jurisdictional court of law for all the settlements.

Ofcourse Higer courts of india cannot add or delete any meaning or definition for deciding the case.

Let the Law of Jurisprudence decide now itself to avoid any trade complications and resentments

angela (Manager - Taxation) (34 Points)
Replied 11 August 2017

Dear Mam,

So how should we treat Repairs to car used by directors which was purchased by company and declared as fixed asset and claiming depreciation all theses years.

Can we claim ITC of the repairs for our business. or will i have to split itc used for personal purpose as generally car is used by directors both personally and to office and branch visit.

angela (Manager - Taxation) (34 Points)
Replied 11 August 2017

Dear Mam,

So how should we treat Repairs to car used by directors which was purchased by company and declared as fixed asset and claiming depreciation all theses years.

Can we claim ITC of the repairs for our business. or will i have to split itc used for personal purpose as generally car is used by directors both personally and to office and branch visit.

angela (Manager - Taxation) (34 Points)
Replied 11 August 2017

Dear Mam,

So how should we treat Repairs to car used by directors which was purchased by company and declared as fixed asset and claiming depreciation all theses years.

Can we claim ITC of the repairs for our business. or will i have to split itc used for personal purpose as generally car is used by directors both personally and to office and branch visit.

CA Ashok Prasad (Practitioner) (133 Points)
Replied 03 October 2017

Above challenges will definitely throw some fertile space for litigation.

People across indsutries are available ITC on virtually on all items considering their procurements such as stationery, laptops, foods received at corporate office, etc. without excercising any respect to two jargons employed in the GST Laws i.e. (1) "Ïn course of business" (2) "furtherance of business".

Apparently they seem to be right.

Initially VAT Acts across States were passed with minimal ITC Reversals. But later on each States added significant provisions for ITC reversals or restrictions through schedules or Rules.

Experience of same trend is mostly likely expected in one or two years down the line.

This may get aggravated once petroleums products are brought under GST.

On personal notes, ITC on stationery, laptop/printer used outside factory or business building such as at corporate office, few repairs services of cars/laptop, etc. may not be extended.