Whether 180 days payment clause applicable if partner brought his assets as capital

[KARAN VERMA]

Sir, there are two private limited companies who want to make partnership firm in which one company brought cash as its capital and other company brought his assets as capital.

Now, that company transfer his assets to partnership firm in form of capital introduce by partner.And company charge GST on transfer of assets to partnership firm.

Now, question is whether such partnership is eligible to take input tax credit on purchase of such assets because no payment is made to company who sold such assets due to capital introduce by such partner.

AI Summary

Can a partnership claim ITC on assets contributed as capital without payment? Examining CGST Act's conditions and implications. Two private limited companies are forming a partnership where one contributes cash and the other contributes assets as capital. The issue is whether the partnership can claim input tax credit (ITC) on the assets transferred without payment, as the assets are considered capital contributions. One opinion suggests no consideration is needed, allowing ITC after accounting entries. Another view references the CGST Act, indicating ITC conditions, including payment within 180 days, apply if assets are transferred from an existing business. A further perspective argues that if no payment obligation exists, the 180-day condition is irrelevant, and related party rules might offer additional considerations.