ITC on common services

[Kaustubh Karandikar]

The registered premises of XYZ is partly used by PQR. XYZ is issuing a service invoice for the rent charged to PQR for using this premises. Certain services received by XYZ are common in nature i.e. used by XYZ as well as by PQR. Can XYZ claim full ITC of the same or to the extent of used by PQR, XYZ need to reverse the ITC? As per my understanding, since XYZ is charging GST to PQR for the rent charged, XYZ is eligible to claim full ITC. Please confirm?

[DR.MARIAPPAN GOVINDARAJAN]

XYZ is not entitled to claim full ITC

AI Summary

Input tax credit on shared services not available in full where services are also used by a tenant and GST is charged. The reply records that XYZ is not entitled to claim full input tax credit for services common to both XYZ and PQR where XYZ lets part of its premises to PQR and issues a service invoice charging GST; shared use by the occupier precludes unrestricted full ITC entitlement for those common services.