Input Tax Credit when buyer is outside India

[Kaustubh Karandikar]

XYZ is supplying goods where Bill To party is “PQR(U.K.)” which is outside India but Ship To Party is “ABC, Maharashtra which is in India. Can ABC take credit against the invoice issued by XYZ since PQR as a buyer cannot issue GST invoice in the name of ABC being outside India?

[KASTURI SETHI]

Dear Sir, There is no such provision in GST law. Practically, goods are supplied, consumed and enjoyed in India and a person who uses the said goods in the course of business or furtherance of business should be allowed to avail ITC, if other conditions are fulfilled. In pre-GST era, there was a Board's circular as well as Notification which allowed endorsement on the backside of invoice/bill of entry to the user of Cenvatable goods in or in relation to the manufacture of final product (dutiable). In SEZ Act, there is such practice. In my view, the issue should be raised before GST Council, if there is no technical hurdle.

[YAGAY andSUN]

In our view ABC can't avail the ITC since it is under shipto category. It would be cost to PQR (U.K.).

AI Summary

Debate on ABC's Eligibility for Input Tax Credit on Goods Billed to PQR in the UK Under GST Law A discussion on a forum addresses whether ABC, a company in Maharashtra, can claim Input Tax Credit (ITC) for goods supplied by XYZ when the billing is to PQR in the UK. One response suggests that although GST law lacks specific provisions, ABC should be able to claim ITC if the goods are used in business, referencing past practices and SEZ Act provisions. Another response argues that ABC cannot claim ITC as the goods are categorized under 'ship to,' making it a cost for PQR in the UK. The issue may need to be presented to the GST Council for clarification.