Input credit on rcm

588 views

Save Share

Maitree

Employee

59 Points Posted on 09 October 2017

Following is the case:

There is an assessee who is a trader of imported goods and also has service tax registration because he provides indenting commission services as well. The ratio of goods to service business is 90% : 10%

For outward transportation of goods in trading business, the assessee procures GTA services on which he has paid service tax under reverse charge.

My query is that can the assessee avail input credit on such service tax paid under reverse charge?

Replies (2)

Akash

245 Points Posted on 09 October 2017

Did you mean GST (and not service tax)? I suppose you did.

Well yes you can avail input credit of GST paid under RCM on GTA services. The restriction of 'No ITC' at 5% rate of tax is for the GTA and not for the registered supplier paying tax under RCM.

Hope this clarifies your query.

Maitree

Employee

59 Points Posted on 09 October 2017

Thanks for your reply. I actually meant credit under service tax and not under GST. The query is because the GTA services is being used for trading business and not for service business. In this case also will the assessee be eligible to take input tax credit for service tax paid under RCM?