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

Input tax credit entitlement: recipient directing shipment may claim credit despite portal restrictions blocking IGST credit.
A Maharashtra supplier charged IGST on an invoice to its Maharashtra contracting customer because goods were shipped to Gujarat; the contracting customer contends it may claim input tax credit under Section 16(2)(b) of the CGST Act (deeming receipt where goods are delivered on the direction of the registered person), while the GST portal has frozen place of supply data and blocked credit, creating a procedural barrier inconsistent with the statutory credit entitlement.