GST Credit appearing as Ineligble in Bill To -Ship To Transactions

[Sachin Mohite]

Dear Sir/ Madam,

One of our client (A) of Maharashtra Supplied Material to (C) of Gujarat on the instruction of his customer (B) at Maharashtra. Consideration is paid by B to A and B further raised invoice to C.

A has applied IGST, as material moving outside Maharashtra, in its Invoice to B as per Section 7 of IGST and accordingly uploaded Return showing Place of Supply as Gujarat.

However in GSTR 2 of B on Portal, said invoice is appearing but showing ineligible for tax credit to B.Since apply of IGST by A is as per provisions of IGST, B should get the Credit of the same.

Query : How this technical problem can be solved so that B will get the credit for the same as everything all data on portal is freezed for said transaction.

AI Summary

Dispute Over IGST Charge on Goods Supplied from Maharashtra to Gujarat; Place of Supply and Tax Credit Issues A client in Maharashtra (A) supplied goods to Gujarat (C) on the instructions of their customer (B) in Maharashtra. A charged IGST, considering the goods moved outside Maharashtra. However, B's GSTR 2 portal shows the invoice as ineligible for tax credit. Respondents suggest that since both A and B are in Maharashtra, CGST and SGST should apply, not IGST. The issue arises from software restrictions and interpretations of the IGST Act, particularly concerning the place of supply and eligibility for input tax credit. The discussion highlights the complexities and technical challenges in GST transactions.