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.

[Ganeshan Kalyani]

You are not eligible to take credit.

[Sushil Aggarwal]

Sir, Can you elaborate a little more quoting section/rule which prohibits.

[Alkesh Jani]

Sir,

In this regards, Investment in mutual funds (Securities) and bill raised by stock broker is not eligible for ITC, Please refer Section 17(3) of CGST Act,2017.

Further, Services by way of extending loans, deposits or advances cannot be classified under stock broking services.

This is my point of view.

Thanks

AI Summary

Input tax credit denial for brokerage services: GST on mutual fund trades not claimable under blocked credits rule. ITC on GST charged by a stock broker for sale of mutual fund units is not available; forum replies attribute the disallowance to the GST blocked credit provision (Section 17(3) CGST) and distinguish stock broking from services of extending deposits, loans or advances, treating brokerage GST as an ineligible input cost rather than claimable credit.