GST Input Credit

[Ethirajan Parthasarathy]

A person is registered for GST for payment of tax on rent from commercial property. Subsequently, he diversifies into manufacturing activity. While setting up new business unit, he receives tax invoice for supply of plant & machinery etc., and ITC on the same is duly reflected in his GSTR – 2A. Can he set off this ITC against GST payable on rental income before starting the actual manufacturing.

AI Summary

GST Input Tax Credit from Plant and Machinery Purchases Usable for Offset Against Rental Income Tax A person registered for GST on rental income from commercial property inquires about using Input Tax Credit (ITC) from plant and machinery purchases for a new manufacturing venture to offset GST on rental income. Two respondents agree that ITC can be used in this manner, as there is no requirement for a direct correlation between the source of ITC and the type of taxable supply. Both emphasize that ITC on goods can be applied to services and vice versa, supporting the use of ITC in the course or furtherance of business activities.