A company is dealing in trading of agri commodity, say caster oil. They purchase it at low rates, stores in godowns for many months or even 1 year, and sell when they get good price.
The company also does day to day Future trading in the same commodities, their bills are settled daily and payments made or received from Broking house like Marwadi,etc.
They are claiming ITC on the bills raised by Broking house.
Q:1: Is ITC admissible on broking house invoices, when both are different business activities?
Q 2: Can a plea be made that Future trading business is hedged by actual stock and so both are connected ?
Expert opinion please.
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Rule 42 reversal. Common ITC
Replies (1)
As per Section 17(2) of CGST Act , The amount of credit is restricted to so much of the input tax as in attributable to the said taxable supply.
So ITC reversal is applicable to the extent of the Exempted Outward supply & shall be computed as per the Formula prescribed in Rule 42 of CGST Act .
Yes ,you can claim ITC on broking House invoices as section 16 clearly states any transaction used or intended to be used in course or furtherance of business, the ITC available.
So ITC reversal is applicable to the extent of the Exempted Outward supply & shall be computed as per the Formula prescribed in Rule 42 of CGST Act .
Yes ,you can claim ITC on broking House invoices as section 16 clearly states any transaction used or intended to be used in course or furtherance of business, the ITC available.
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