How to claim ITC of rent paid

[KARAN VERMA]

Sir my head office in Delhi and factory in Punjab. I m paying rent at Delhi H.O., there is no supply from Delhi H.O. How can I transfer input credit paid on rent from Delhi to Punjab.

Kindly guide which option is legally right, ISD or cross charge ?

[Rajagopalan Ranganathan]

Sir,

ISD is the legally right option.

[KASTURI SETHI]

Yes. ISD is the best and legally correct.

[Shilpi Jain]

You could also issue a GST invoice to the factory for the manegerial support services provided by which the credit can move to the factory

AI Summary

ISD mechanism permits transfer of input tax credit from head office to factory, alternatively via cross charge service invoice. Where rent is paid by a head office in one State and the factory in another seeks the input tax credit, the ISD mechanism is identified as the legally correct method to distribute ITC from the head office to other registered establishments; alternatively, a cross charge by issuing a GST invoice for managerial/support services may be used operationally to enable credit transfer.