Input tax credit availability

[Sethuraman Kalyan]

One of our clients , a sole proprietor, having two TIN registrations is carrying on business as earth movers and contractors and also as pre mixed concrete manufacturer.

He has purchased materials for building such as cement,stones etc using the TIN of business-1(ie., erath moving and construction contracts) and transferred the material to business-2. Can the input credit in business-1 be availed in business-2. Both businesses having two different TINs.

Please clarify.

Thanks in advance.

[Viswanathan Nemmara]

Two business with two different TINs are two different entities before the eyes of the Sales Tax Department.  They will not allow the ITC of one entity to be availed by another entity.  What you can do is transfer the property in goods of business1 to that of Business 2 by raising a Tax Invoice.  This way Business 1 can claim their ITC and Business 2 theirs.

[Sethuraman Kalyan]

Thanks. 

[Ganeshan Kalyani]

I would like to add to above reply that having more than one TIN in a state is against the provision. It is very clear that each state should have one TIN for one business. How can one company sell it to itself having another TIN. Request experts to cast their point of view in this regard.

AI Summary

Input tax credit between separate TIN registrations barred; transfer goods by tax invoice to preserve correct ITC allocation. The Sales Tax Department treats separately registered businesses under different TINs as distinct taxable persons, so input tax credit belonging to one registration cannot be availed by another. To align entitlement and documentation, goods should be transferred between registrations by issuing a tax invoice for the inter-registration transfer; this permits the transferor to claim its ITC and the transferee to record taxable acquisition, while avoiding cross-registration appropriation of ITC.