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How should we take the benefit of input GST credit in the following example?

Basava Raj (38 Points)

21 January 2019  
A CG company located in karnataka(head office) has its branches in Delhi and mumbai, and the head office is incurring "hotel stay" expenses for the official tours of head office employees to Delhi n mumbai. So, the service provider(hotel guy) charges CGST & SGST in his bill since the criteria for charging GST is "PLACE OF SUPPLY"(service has been provided in the hotel which is located in Delhi r mumbai as the case may be).so the head office cannot take the cgst and sgst input credit bcoz the service provider is located in other state. Pls give the answer whether we can take the credit by instructing the hotel guy to raise the bill in the name of GSTIN of Delhi r mumbai branch as the case may be,so that we can take the credit through branches since they(branches) also located in the state where the supply of services has been provided?...... This is the extreme typical doubt I got in the audit till date.....

 4 Replies

pritesh (CA Final student) (7071 Points)
Replied 21 January 2019

You can take Credit of Cgst but not the sgst.

it is good idea if hotel raise bill in the name of delhi and Mumbai branch

Replied 21 January 2019

Sir can you explain from which provision you are gathering that we can claim Cgst and not Sgst

pritesh (CA Final student) (7071 Points)
Replied 21 January 2019

As per my understanding, we can utilize CGST paid in one state against CGST paid in another state.

CGST is basically controlled by Central Government. I am yet to come across a situation like this but logically I think that it can utilized.

Now comes the part of SGST. Maharashtra SGST account is handled differently and same is with Karnataka SGST account. Both are different accounts and that is also the reason we can’t take whole credit of hotel stays done by a GST registered tax payer in Karnataka because they charge Karntaka SGST and CGST.

Hence, we can offset CGST of different states but I don’t think that we can offset SGST of different states.

Basava Raj (38 Points)
Replied 21 January 2019

sir can u please provide any provision for ur suggestion plsss

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