Whether ITC is available when goods are held by supplier as bailee

[Deepak Garg]

I have purchased ascertained goods from the supplier after making consideration and due to shortage of space in godown of the recipient, the supplier retains the goods as bailee. The supplier filed its return and shown supply of the goods in his GSTR-1 and 3B. Whether the recipient is eligible for ITC without receipt of goods (where goods are held by supplier as bailee) in terms of section 16(2)(b)(i) of CGST Act?

AI Summary

Debate on ITC Eligibility: Goods Held by Supplier as Bailee Due to Space Issues at Recipient's Premises Under GST A discussion on the eligibility for Input Tax Credit (ITC) under the Goods and Services Tax (GST) regime when goods are retained by the supplier as a bailee due to space constraints at the recipient's premises. One participant argues that ITC is permissible since ownership remains with the recipient, and the supplier acts only as a custodian. Another participant contends that ITC is not allowed because the goods have not been delivered to the recipient or another designated person. The debate hinges on interpretations of section 16(2)(b)(i) and section 2(93) of the CGST Act, 2017.