ITC on tax paid under RCM

[Guest]

Dear Expert,

We received some food goods (Namkin etc.) and sponsorship services from unregistered person and paid GST under RCM. can we eligible for availed ITC thereon?

Thanks in advance

[RAJA SWAMINATHAN]

The Tax paid on reverse charge basis including purchases from unregistered dealers will be available for input tax credit provided such goods and/or services are used, for business purpoes and not for personal use. Peron receiving the service or goods can avail input tax credit.

[Rajagopalan Ranganathan]

Sir,

In respect of sponsorship service supplied by unregistered person you can avail the ITC of gst paid on such service under RCM. However regarding Namkin I have my own doubt since normally namkin is for personal consumption of the recipient.

[KASTURI SETHI]

Not admissible.

[DR.MARIAPPAN GOVINDARAJAN]

I endorse the views of Shri Rajagoapalan

[Ravikumar muthusamy]

can we claim it on the basis as gifts to employees?

[KASTURI SETHI]

Not at all.

[Ravikumar muthusamy]

note sir thank you

[Himansu Sekhar]

On namkins, ITC is not available. But if sponsorship service is for business purpose, ITC is available

AI Summary

Input tax credit on reverse charge: available when GST paid to unregistered suppliers is for business use, not personal supplies. Tax paid under the reverse charge mechanism to unregistered suppliers is claimable as input tax credit only where the goods or services are used for business purposes and not for personal consumption; sponsorship services paid under RCM may qualify as ITC if used for business, whereas consumable items supplied for personal use (e.g., namkin/snacks) are not eligible and treating them as employee gifts was not accepted as a basis for credit.