Eligibility as ITC

[Bharat Cholleti]

Dear sir,

We got a supply of goods contract from APCPDCL (Electricity board), which supply got delayed, penalty imposed by the APCPDCL on that IGST was collected, Is supplier will be entitle to take ITC of IGST paid on penalty. please advise. Thanks in advance.

AI Summary

Debate on ITC Eligibility for IGST Penalty Under Schedule-II, Clause 5(e); Refund Option Suggested via Circular 178. A query was raised regarding the eligibility of Input Tax Credit (ITC) on Integrated Goods and Services Tax (IGST) paid as a penalty by a supplier under a contract with APCPDCL. A respondent noted that this situation falls under Schedule-II, Clause 5(e), but may involve litigation since 'penalty' is not explicitly mentioned. Another contributor agreed, emphasizing that the issue is not about GST liability but whether the supplier can claim ITC on the penalty. It was suggested that if tax is paid, credit should be eligible, or the supplier could seek a refund from APCPDCL per circular 178.