Eligibility of ITC

[THYAGARAJAN KALYANASUNDARAM]

Dear experts,

As per Notification No.02/2022-Central Tax (Rate) dated 31.03.2022 my query as stated below.

1. Can the seller charge and collect 6% from the ultimate customer without availing ITC.

2. Is that ultimate customer eligible to avail the ITC as charged @ 6% by the seller?

Please share your opinion. Thanks in advance.

[Rajagopalan Ranganathan]

Sir,

The seller/supplier of the exempted goods (goods mentioned in Col.3 of Notification No. 2/2022 will not be eligible to take credit of gst paid on goods and services used in the goods supplied (mentioned in Col. 3 of the Notification). However, the Notification does not prohibit the recipient of the said goods from availing the gst paid @ 6% on such goods.

[THYAGARAJAN KALYANASUNDARAM]

Thank you so much sir.

AI Summary

Input tax credit: seller cannot claim it on exempted goods though recipient may claim GST credit on purchase. The supplier of goods listed as exempted in the notification is not entitled to claim Input Tax Credit on GST paid for inputs and input services used in supplying those goods. The notification does not bar the recipient of such goods from claiming GST credit for tax charged on the supply, so the recipient may be eligible to claim input tax credit subject to normal GST conditions.