LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Lfr charged by bpcl from its dealer with gst, whether dealer can get input of this gst ?

S K MISHRA (Accounts Professional) (26 Points)

08 September 2018

We are a Dealer of BPCL running Petrol Pump at Panchkula. BPCL is charging Licence Fee Recovery (LFR) from us alongwith GST @ 28% on LFR. The question is - Whether Dealer should take Credit of this 28% GST paying on LFR ? Pleae advice.

Reply
Follow
Share

17 Replies

Priyokumar Thounaojam (148 Points)
Replied 08 September 2018

yes you can claim all the tax. we are alsi runnung iocl RO.

1 Like

Rohit Tibrewal (Student & Senior Accountant) (3193 Points)
Replied 08 September 2018

Input tax credit of LFR will not be available, as they are in relation to exempted goods under GST.

1 Like

Pankaj Rawat (GST Practitioner) (55032 Points)
Replied 08 September 2018

Yes , you can claim ITC but as per secrion 17(2) the amount of credit shall be restricted to so much of the input tax as is attributable to the said taxable supplies .

1 Like

amit pal (26 Points)
Replied 09 September 2018

[2] Where the goods or services or both are used by the registered person partly for effecting taxable supplies including zero-rated supplies under this Act or under the Integrated Goods and Services Tax Act and partly for effecting exempt supplies under the said Acts, the amount of credit shall be restricted to so much of the input tax as is attributable to the said taxable supplies including zero-rated supplies.

S K MISHRA (Accounts Professional) (26 Points)
Replied 09 September 2018

Rohit Ji, I humbly disagree with your submission, because Petrol, Diesel etc are exempted under GST, but this is the matter of Licence Fee Recovery (LFR) which is not exempted and this is the reasons Oil Marketing Company charging GST on LFR from its Dealer and Dealer should have right to Credit this Input GST just similer to any other Rent paid during the course of Business. Please suggest.

Priyokumar Thounaojam (148 Points)
Replied 09 September 2018

you can claim itc on lfr. i m also a dealer of Ioc. we also claim all itc. its under services.

S K MISHRA (Accounts Professional) (26 Points)
Replied 09 September 2018

Originally posted by : Priyokumar Thounaojam
	you can claim itc on lfr. i m also a dealer of Ioc. we also claim all itc. its under services.

Yes you are right. Its not a Purchase of Goods, but it is a Purchase of Service, just like other service of AMC etc. etc.by the dealers

samit kundu (7 Points)
Replied 15 January 2019

i think u cannot claim itc on lfr due to all the outward supply are non gst supply

1 Like

Sandeep Gupta (Owner) (28 Points)
Replied 23 April 2019

As per petroleum.nic.in, you can not claim ITC of GST charged on LFR.

please click the link below and serach LFR word in the file for further details

https://www.petroleum.nic.in/sites/default/files/FAQs%20on%20GST.pdf

Sandeep Gupta (Owner) (28 Points)
Replied 10 June 2019

As per petroleum.nic.in, you can not claim ITC of GST charged on LFR. please click the link below and serach LFR word in the file for further details (Refer Point no. 32)

Read more at: https://www.caclubindia.com/forum/details.asp?mod_id=483417#reply

Sandeep Gupta (Owner) (28 Points)
Replied 10 June 2019

Atul Garg (Telly gst account) (2 Points)
Replied 14 September 2019

Sir lfr me input tax credit clean krna h ki nahi

Sandeep Gupta (Owner) (28 Points)
Replied 15 September 2019

It's a ineligible Input, you can not claim Tax input of GST charged on LFR because it is related to Petrol & Diesel, Which are non-GST Supplies.

Chintan Sanishvara (10 Points)
Replied 19 October 2019

Sir, Please Clarify for following issue:

In case of LFR Charges we paid TDS as rent u/s. 194I of Income Tax Act,1961 and it is for operating of business only calculation of the same is based on purchase of petrol and diesel,

So that Input of LFR Charges can treated as exempt supply in GST but taxable supply in VAT i.e. in Indirect Taxes it is taxable,

AND INPUT TAX CREDIT ON GST CAN AVAIL OR NOT ?, ON THE BASIS OF ABOVE,

I request you to please provide further guidance on the same,

Thank you.