Can a company claim ITC on its Asset Purchase, in case if its purchase and Sales is Zero Rated GST.
JFI: TDS-194j (10%) is applicable on company's Sales & Purchase
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ITC on Asset Purchase for Zero Rated Purchase and Sales
Replies (5)
Quick Summary
Prima facie yes, subject to restriction u/s 17(5). As outward supply is zero rated (export or SEZ), refund could be applied under GST for accumulated ITC. Although, note, capital goods credit is not eligible for such refund, therefore, refund with payment of tax option is recommended to ensure tax optimsation.
194J is for services, do you mean the asset in this case is intanglible asset?
Yes, company is eligible for claiming ITC subject to provision of section 16 and 17 of CGST act
Company is eligible for claiming refund of unutilised ITC under following grounds:
As per section 16 of IGST act, A registered person making zero rated supply have either of two options:
1) Supply under LUT or bond, without payment of tIGST and claim refund of unutilised ITC or
2) Supply on payment of IGST and claim refund of such tax paid
Company is eligible for claiming refund of unutilised ITC under following grounds:
As per section 16 of IGST act, A registered person making zero rated supply have either of two options:
1) Supply under LUT or bond, without payment of tIGST and claim refund of unutilised ITC or
2) Supply on payment of IGST and claim refund of such tax paid
Company Assets are tangible assets hardware software and office Furniture
Yes, ITC should be eligible fully. To ensure the refund is claimed, opt for with payment of tax (will be faster and easier). Although, ensure restrictions such as merchant export and other customs exemptions have not been claimed. Refer Rule 96(10) read with notification 16/2020.
Yes Agree with CA Akshay
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