Input Tax Credit

[VIGNESH]

sir. kindly clarrify A dealer of biscuts take a new dealership in mobile phones , he runs the business as proprietorship and uses same GST number. Can he set off the GST input on mobile against sale of biscuts or should he maintain product wise accounts and adjsut GSt according to the products sold.

[Rajagopalan Ranganathan]

Sir,

There is no bar in CGST Act for cross utilization of ITC earned in respect of one type of goods for payment of tax on other type of goods. However before doing so it is better to inform the Department in writing about the same to avoid allegation of suppression of fact, wilful mis-statement etc to evade payment of tax by the Department in future.

[KASTURI SETHI]

There is no one to one correlation for availment and utilisation of ITC in CGST Act. ITC must be used in the course or furtherance of business. Registration number will remain the same but you will have to apply for addition of supply of mobile phones in your application for registration already filed.. Registration must be amended to this effect. Amendment is required.

[Ganeshan Kalyani]

I agree with both the experts.

[Himansu Sekhar]

Maintaining product wise stock is required. Credit can be taken and utilised in a combined manner

[KASTURI SETHI]

Yes. Maintaining product wise stock will make the assessee safe.

[Vishesh Goyal]

I agree with Kasturi sir. Registration must be amended to set off the GST input tax credit on mobile against the sale of biscuits. GST number will remain the same but you will have to file an application for the addition of a supply of mobile phones to your GST registration certificate.

AI Summary

Input tax credit cross-utilisation permitted, but registration amendment and product-wise records advised to ensure compliance. Input Tax Credit may be applied across different types of supplies where utilised in the course or furtherance of business; there is no statutory bar on cross-utilisation. To reduce compliance risk, taxpayers should notify the tax administration, amend the registration to include the new supply, and maintain product-wise accounts and stock records to evidence the bona fide use of credit.