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Input tax claim

19 March 2021

if trust registad under 12aa and trust open a hospital and purchase madical equipments with gst . can hospital claim input tax

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7 Replies

jay (analyst) (44 Points)
Replied 20 March 2021

Services by an entity registered under Section 12AA of Income-tax Act, 1961 by way of charitable activities are exempt from whole of the GST, therefore no ITC can be claimed.

CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 20 March 2021

It is exempted

Jamal Uddin Siddiqui (350 Points)
Replied 20 March 2021

I am asking on purchase of machinery not services provided by hospital

jay (analyst) (44 Points)
Replied 20 March 2021

the hospitals don't have GSTIN hence there is no question about being able to claim ITC or not.

on the other hand if it a medical store or any other type of assessee that is providing auxiliary services to hospitals that are registered with GST may claim ITC, if the purchase is in the nature of their real input.

anil jain (Partner) (1067 Points)
Replied 21 March 2021

what will you do after taking ITC when your output supply is exempt .

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Jamal Uddin Siddiqui (350 Points)
Replied 29 March 2021

No I want to know how gst will be refund

CA Akshay Hiregange (Partner - Audit & Assistance) (4515 Points)
Replied 29 March 2021

Where there is no GST output on account of exempt supply, there is no option of GST refund. Refund arises in cases where there is zero rated supply, i.e. supplies to SEZ, Exports or in special cases such as inverted duty structure (ITC on inputs only).

Where any machinery is used to provide exempt and taxable supplies - ITC can be claimed as per section 17 r/w Rule 43 (computation to be as per the Rules).

Generally medical products fall under 5%, 12% and 18%, therefore appropriate classification of procurements could reduce cost.