Eligibility of Input tax credit

[Sushil Aggarwal]

XYZ, a Company is registered person as trader of goods under GST. It invests some of its funds in Mutual Fund. At the time of sale of MF, it pays GST on bill of Share broker of Mutual Fund. Is the company eligible to take credit of the same more particularly when the Services by way of extending deposits, loans or advances etc. has been exempt from GST.

AI Summary

XYZ Denied Input Tax Credit on Mutual Fund Sales Under Section 17(3) of CGST Act, 2017; Stock Broking Rules Clarified. XYZ, a company registered under GST as a trader of goods, inquired about the eligibility for input tax credit (ITC) on GST paid during the sale of mutual funds via a share broker. The first response indicated that the company is not eligible for ITC. A follow-up request for clarification led to a detailed reply citing Section 17(3) of the CGST Act, 2017, explaining that investments in mutual funds and related broker bills do not qualify for ITC. Additionally, it clarified that services related to loans, deposits, or advances are distinct from stock broking services.