GST ITC on AMC

[Madhavan iyengar]

A Company has received an Invoice for AMC bill for period January 2018 to December 2018 towards maintenance services. Company has made the entire payment in the month of January 2018

Issue: Can the Company avail the entire GST-ITC as mentioned in the AMC in the month of January 2018.

[CASusheel Gupta]

Yes, can be claimed

In case of goods also, we take ITC at the time of inward supply irrespective of actual date of consumption.

[Madhavan iyengar]

but one of the conditions to avail itc in gst law is that the company should have received the goods / services ???

[KASTURI SETHI]

In terms of Section 16(2) of CGST Act, a registered taxable person shall not be entitled to ITC of any supply of goods or services unless he has received the goods or services or both. Unless he is in possession of a tax invoice or debit and tax has been paid. Thus in this situation as explained by the Querist ITC cannot be taken as services are not received. Advance is subject to final adjustment and provision/ completion of service. ITC is available only on receipt of inputs or services.

[Ganeshan Kalyani]

Practically it is very difficult to apportion the credit whenever the service in terms of AMC is received. I have inverter in my home. The technician is supposed to come quarterly to check the inverter. But the date and sometime month is also changes as per availability of me and sometime his. Similarly in case of yours can you maintain a log as to when he is giving service in terms of AMC. If yes take credit when service is received . otherwise it can be safely decided that credit can be taken on the receipt of invoice .

[CASusheel Gupta]

Suppose I purchase an AC on 31.03.2018

It am entitled to one AC (goods received), one year warranty (shall be availed in next year) and three free service coupon (shall be availed in next year) .

How to apportion now between these three.

I believe unless the stakes are high, we can take credit on receipt of invoice. At the most at year end we can reverse an estimated amount and can take re-credit in April

[KASTURI SETHI]

Nicely and to the point explained by Sh. Ganeshan Kalyani Ji.

[Ganeshan Kalyani]

Thanks Sri Kasturi Sir.

[Madhavan iyengar]

thanks susheelji kalyaniji and kasturiji for the detailed analysis.

AI Summary

Input tax credit entitlement depends on receipt of services; invoice claims may need apportionment and year end adjustments. Entitlement to GST input tax credit for an upfront AMC payment depends on receipt of the services and possession of a tax invoice with tax paid; absent actual receipt strict entitlement is not triggered. Practitioners propose maintaining service logs, claiming credit on invoice receipt for administrative convenience, and performing year end reversals or adjustments to align ITC with actual service receipt.