ITC on goods in Transit

[DK AGGARWAL]

Respected Sir/Madam

Kindly guide on the following issue

Goods dispatched on 31st of March and received in April,

1--Can we claim ITC in the month of March as per 2B

2---Or we should claim ITC as per books in the month of April, the month in which goods received. If so it would be mismatch of 2B then how to satisfy the notice from GST people.

The goods in transit can be a regular feature in many business when goods are received in next of the dispatch month.

Please explain in view of recent amendments of claiming ITC as per 2B only.

Regards

D K Aggarwal

[Ravinesh Sinha]

ITC on receipt of actual receipt of goods provided upon the last lot or installents in case goods are receivable in lots or installments

However if the goods are for transit sale deeming provision of receipt of goods as per explanation to section 16(2)(b) is applicable

[KASTURI SETHI]

You are advised to follow/prefer Section 16 (2) (b) of CGST Act. First comply with all the conditions mentioned in Section 16(2). Thereafter, you are entitled to avail ITC.Such practice will be fool-proof. Primary requirement is the compliance of Section 16(2). Otherwise also in view of such regular feature in your business, the possibility of recovery of interest and imposition of penalty cannot be ruled out.

 

 

[Shilpi Jain]

Agree. Avail the credit when received the goods. Make it a habit to have a reco sheet in place every month for 2b vs 3b with proper reasons, so that it can be submitted whenever questions by the department

AI Summary

Clarification on claiming Input Tax Credit: Follow Section 16(2)(b) of CGST Act, claim upon actual receipt of goods. A participant in a discussion forum raised a query about claiming Input Tax Credit (ITC) for goods dispatched in March but received in April, questioning whether to claim ITC in March as per Form 2B or in April when the goods are received. Respondents advised following Section 16(2)(b) of the CGST Act, which requires claiming ITC upon actual receipt of goods. They emphasized compliance with Section 16(2) to avoid penalties and suggested maintaining a reconciliation sheet to address any discrepancies between Form 2B and Form 3B, ensuring readiness for departmental queries.