Regarding Input under SAC 9966

[m Bhagat]

R/s,

I have question ?

Can a dealer setoff his GST amount (i.e SAC 9966 5% without input) with another HSN code .

Here dealer have supply of service as well as retails businees. He is not taken any input from supply service .

he taken input from retails business , which is purchase and resell it. can he adjust the Output GST tax of supply of service (i.e SAC 9966 Rent/Hire of Vehicle ) with input recieved from pucrhase of goods for resell.

thank you

[KASTURI SETHI]

Yes. ITC can be utilized towards any taxable outward supply of goods or services. Credit is substantive right. Only two basic conditions are there:-

GST must be paid on supply of inputs/input service and must utilised towards supply of outward taxable goods or services, if otherwise eligible.

[Ganeshan Kalyani]

Input tax credit is eligible if the input is used in course or furtherance of business. Trading and giving vehicle on hire is two different business . input tax credit for trading business is not in course or furtherance of service of giving vehicle on hire . the input does not seems to be in course or furtherance of business . Hence in my view credit is not eligible .

[Alkesh Jani]

Sir,

Here the question is whether ITC of inputs ( here of trading) can be utilized for payment of tax with regards, to services falling under SAC 9966. In this regards, I agree with the view of Sh. Kasturiji, as there is no restriction for utilization of eligible ITC.

Further, SAC 9966 can be classified under rent-a-cab service, therefore, ITC cannot be availed in terms of Section 17(5)(b)(iii). Further, it would very difficult to establish the nexus with regards to during the course or furtherance of business.

AI Summary

Input tax credit: eligibility and utilisation depend on business nexus and blocked-credit rules for rent-a-cab services.
The query asks if ITC from retail/trading purchases can be set off against output tax on SAC 9966 vehicle-hire services. One advisory view treats ITC as a substantive right usable for any taxable outward supply if eligible. Another stresses that ITC must be used in the course or furtherance of the same business-trading inputs do not support vehicle-hire services-so ITC would be ineligible. A further reply notes SAC 9966 may be subject to blocked-credit rules for rent-a-cab services and that establishing nexus would be difficult, also precluding ITC.