Important query regarding gst consumption input offset

ITC / Input 161 views 3 replies

varad

63 Points Joined December 2015

Hi Team Good Morning.

I have a specific query for taking Input offset for purchase for consumption.

A computer services business has asked whether every purchase made for self consumption (personal items like refrigrator / mobile phones) can be claimed for input offsets. There is divided opinions and views regarding this ----

1) Some are encouraging such purchase as mobile phones or even friedge can be shown as office purchase for staff etc, Invoice must be taken on firms name in such cases and payment must be made through current account.

2) Other are warning that it is not as per law and since GST is fairly new no assessment is yet done and this issue may come up after 2-3 years when assessment will be done. It will not be responsibility of CA and customer has to take risks involved.

Can someone pls. shade light on this as if input offset claimed ,substantial savings will be there in household purchase too off course if it is not illegal.

Thank you

Regards

varad

Replies (3)

VAIBHAV CHATURVEDI

CA ARTICLE

143 Points Joined September 2016

yeah it can be claimed but u need to take bill in name of firm
apart from that u need to show these assets in balance sheet as well as need to take depreciation.
however whenever these assets are sold/transfer/destroyed/demolished it will be treated as supply in Schedule I and u need to pay tax as if u have supplied them even if no consideration received

vamsi krishna

Article Assistant

268 Points Joined May 2015

Dear Querist,

if anything purchased for self consumption perspective, Input tax credit will not be eligible (as per section 17 of CGST act 2017).
if you are unable to prove the nexus between the business and purchase, it will be not eligible to take ITC as per GST law.

remember one thing,
if you want to take ITC then one of the important condition is bill should be in the name of firm,
but all bills in the name of firm will not be eligible to claim as input tax credit.

if you refer the definition of "Input tax" and "Input tax credit", the diff you will get to know.

Thanks
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