ITC ON OFFER FOR SALE OF SHARES

[SHARAD ANADA]

Promoters of the limited compay offers their shares for sale to the public. After offer for sale by the promoters authorised and paid up share capital of the company remains the same. No new fund is introduced in the company. The company have incurred expenses for such offer for sale of promoters scurities and availed ITC on the said expenses.Whether the company is eligible for ITC?

[Ganeshan Kalyani]

Yes, ITC is eligible for taking credit.

[DR.MARIAPPAN GOVINDARAJAN]

ITC is eligible in this case,

[Padmanathan KV]

Dear querist, kindly provide the nature of expenses incurred.

[SHARAD ANADA]

Natrue of expenses are Charged On listing of the shares , amount Charged On underwriting fees, Charged Or initia fees on signmg of the mandate etc. All such expenses are paid to consultant who charged GST on the said servies invoices. As per department offer for sale of share is securities transaction and securities are neither goods nor services hence as per Sec. 16(1) ITC is not eligible. Pl guide

[Padmanathan KV]

Though securities are neither goods nor service, the impugned services mentioned by you such as underwriting, listing of securities etc are not themselves 'securities' per se and are indeed services. Therefore, credit of input tax charged on supply of such services under section 16(1) since in it in the course or furtherance of business.

AI Summary

Company's ITC Eligibility on Public Share Sale Expenses Debated; Section 16(1) Supports ITC for Related Services Promoters of a limited company offered their shares for sale to the public, incurring expenses and availing Input Tax Credit (ITC) on these expenses. The question raised was whether the company is eligible for ITC, given that the offer for sale is a securities transaction, and securities are neither goods nor services. Several replies affirmed ITC eligibility, arguing that expenses related to services like underwriting and listing are indeed services and qualify for ITC under section 16(1) as they are in the course of business.