IGST Input Credit on goods received from overseas OEM Supplier on LOAN

[SARAVANAN RENGACHARY]

Sir,

Can we avail IGST input credit on the material IMPORTED for demonstration purpose on payment of duty. Please note that the imported material is received on LOAN basis. No foreign exchange is involved. However, applicable import duty is paid.

Please suggest.

Regards

Saravanan.

[KASTURI SETHI]

Yes because it is in the course of business or furtherance of business.Presuming that the word'material' stands for machinery, when the goods are to be returned proportionate credit will have to be reversed.

[subramanian vijayakumar]

I agree with expert Sethy sir views

[Kishan Barai]

Totally agree with the views of shree KASTURI SETHI sir,

you will get refund of IGST paid at the time of imports but make sure you need to sell with products with bill & GST has to be charged in it, only by demonstration & no sales, then no ITC on import duty IGST can be claimed.

[KASTURI SETHI]

Sh.Krishan Barai, Sir You seldom appear in this forum. Pl. participate daily. I think you can spare 15-20 minutes daily which matter a lot for this forum as well as visitors and experts.

AI Summary

IGST input credit on imported loaned goods: credit allowed for business use but must be reversed if goods are returned. IGST input credit may be available on goods imported and received on loan when used in the course of business; credit depends on business use and taxable supplies. If loaned goods are to be returned, any ITC availed must be proportionately reversed. Mere demonstration without resulting taxable sales restricts entitlement to ITC on import IGST; taxable sales with invoices and GST support recovery or refund of IGST paid at import.