ITC of IGST charged with different POS while registered in other state

[Krishna Murthy]

Sir,

Mr A is the Main Contractor registered in Andhra Pradesh and obtained works contract to construct immovable property in Delhi. Mr A sub-contracts the said work to Mr B who is also registered in Andhra Pradesh. As per Advance Ruling in the case of T & D Electricals (AAR Karnataka) = 2020 (4) TMI 693 - AUTHORITY FOR ADVANCE RULING, KARNATAKA, separate registration is not required to be taken and works contract can be done by charging IGST.

Now the query is, whether Mr A, the Main Contractor is eligible to take ITC of the IGST charged by Mr B, sub contractor. Though, both Mr A and Mr B resides in the same state, since POS is Delhi, it is necessary that Mr B charges IGST stating POS as Delhi.

AI Summary

Main Contractor's IGST Credit Claim Disputed Due to Different Place of Supply; Consider Delhi Registration or Advance Ruling. A main contractor, registered in Andhra Pradesh, subcontracts work to another contractor from the same state to construct property in Delhi. The issue revolves around whether the main contractor can claim Input Tax Credit (ITC) on Integrated Goods and Services Tax (IGST) charged by the subcontractor, given the Place of Supply (POS) is Delhi. Responses highlight that while IGST can be charged, claiming credit might be disputed due to the POS being different from the registration state. Suggestions include considering registration in Delhi or seeking an Advance Ruling for clarity on utilizing IGST credit.