ITC on cash purchase.
Sir I am an Accountant.From the information received from another Accountants,I know that if the dealer made the purchase for Rs.50000/- or more in cash then the dealer can not claim the ITC on his said cash purchase . Sir please guide me this information is right or not if yes which section is applicable.thanks
Replies (8)
Quick Summary
you can claim itc in gst if the invoice is valid and contains your GSTIN. But if you pay 50000 in cash you will not be able to claim expense in income tax.
As I understand, there is no such restriction to claim ITC under GST. However, such expenses cannot be claimed as deduction under Income Tax Act.
Agree
Sir the said amount of Rs 50000/- or more paid on account of his purchase for retail sale business.Sir it is not business expenses,it is a purchase for retail trading.
Agreed
You can claim ITC if shown in GSTR-2A even if amount paid in cash but when filing return the purchase shall be disallowed as paid in cash in excess of 10000/-.
Mode of payment is completely irrelevant in gst regime, its only the nature of supply is what matters!
This restriction is not there in GST but it is there in income tax. You will not be able to claim this as an expense as per Income Tax Act. This will give rise to a mismatch between expenses as per GST and expenses as per Income Tax. To avoid such differences it is always better not to make such purchases in future
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