Head office input credit for rent paid

[KARAN VERMA]

Sir, factory premises in Himachal pradesh and head office in Delhi. Company takes registration only in Himachal pradesh and no registration in Delhi because there is no supply.

Now, company own furniture, A/c and rent payment in Delhi, how they can take benefit of input credit accumulate at Delhi and where such input credit is utillised.

Whether it is advisable to take GST number at Delhi and how they can transfer credit from Delhi to Himachal Pradesh.

[ABHISHEK TRIPATHI]

Dear Karan Verma Ji,

The company in the Himachal is only entitled to claim ITC as it is a registered person. So, if the invoices (for Furniture, AC, Rent etc.) are raised on Himachal then only you are entitled to ITC. Hope your invoices (for Furniture, AC, Rent etc.) are not raised on Delhi-Head Office (unregistered cannot avail ITC). After that credit utilization section(s) 49, 49A and 49B may be referred.

After even taking registration for Delhi Office, you just cannot transfer the credit. Law doesn’t allow such transfer other than exceptions like S. 18(3).

[Brijesh Thakar]

If possible, take registration as ISD and comply with provisions of section 20 for taking ITC

[ABHISHEK TRIPATHI]

Dear Sir,

ISD is for the distribution of 'input services'. ISD doesn't entitle you to get credit, section 16 does. How will ISD registration in this particular case will of any help?

[Brijesh Thakar]

ISD is not for distribution of service but for distribution of credit. The whole concept of ISD from service tax era is for distribution of credit by head office to it's branches in case where invoice is in the name of HO and service is used by branches whether directly or indirectly.You can refer section 20 of the CGST Act.

[KASTURI SETHI]

Sh.Brijesh Thakar Ji,

As per Section 2(61) of CGST Act, an ISD can distribute the credit of Central Tax, State tax, Integrated Tax or Union Territory Tax paid on input services only and not of credit of GST paid on goods.

Am I right, Sir ?

[Brijesh Thakar]

Ji sir,

Perhaps I haven't been able to explain properly. I have only written about transfer of credit of input services. It is a concept taken from service tax. I answered reading the heading of credit of rent paid. As far as I know, under GST, credit of goods cannot be transferred without transfer of goods. To transfer ITC of goods, goods also needs to be transferred. But in case of service, ISD can help.

AI Summary

Input tax credit allocation: registered entity claims ITC; ISD can distribute service credit but goods credit cannot be shifted.
ITC can be claimed only by the registered person to whom invoices are addressed; an unregistered head office cannot independently avail credit. ISD may distribute credit of input services to units, but ISD covers only service credits and credit of goods cannot be transferred without transfer of the goods. Registration at the head office does not automatically allow transfer of accumulated ITC to another registration except under limited statutory exceptions; credit utilization and distribution rules govern movement of ITC.