UTILIZATION OF INPUT TAX CREDIT

[VIGNESH]

sir kindly clarify why ITC was not allowed in the case when no restriction is placed in the ACT for utilisation of ITC. CASE- M/s Aristo Bullion Pvt Ltd - 2021 (4) TMI 561 - AUTHORITY FOR ADVANCE RULING, GUJARAT issue raised- Can the applicant use Input Tax Credit Balance available in the Electronic Credit Ledger legimately earned on the inputs/raw-materials/inward supplies (meant for outward supply of Bullions) towards the GST liability on ‘Castor Oil Seed’ which were procured from Agriculturists and subsequently meant for onward supply?

[Rajagopalan Ranganathan]

Sir,

Since you are paying gst under reverse charge mechanism under Section 9 93) of CGST Act, 2017 in respect of ‘Castor Oil Seed’ which were procured from Agriculturists, you are not eligible to pay gst utilizing the ITC earned by you in respect of inputs/raw-materials/inward supplies meant of bullion.

[Rajagopalan Ranganathan]

Sir,

I apologizes for understanding your question wrongly. For utilization fo ITC no one-to-one correlation is required, that is, to demonstrate the use of bullion in the business of supply of castor oil seeds and vice-versa. Therefore in my view the order of AAR is to be appealed to appellate authority. I am of the view that you can very well use the credit for payment of gst on supply of castor oil seeds.

[Ganeshan Kalyani]

I agree with the views of Sri Rajagopalan Sir.

AI Summary

Debate on Using Input Tax Credit for GST on Castor Oil Seeds Under Reverse Charge Mechanism A query was raised regarding the utilization of Input Tax Credit (ITC) under the Goods and Services Tax (GST) framework, specifically whether ITC earned on inputs for bullion can be used for GST liabilities on 'Castor Oil Seed' procured from agriculturists. One response indicated that under the reverse charge mechanism, ITC cannot be utilized in this manner. However, another response suggested that there is no requirement for a direct correlation between the inputs and outputs, advocating for an appeal against the ruling and supporting the use of ITC for GST on castor oil seeds. A third participant agreed with this perspective.