ITC under GST

[NANDINI SARKAR]

Dear Team,

At the outset, I would like to share our company details and activities.

We operates on a Pan-India basis, in over 90 cities, in the areas of statutory compliance, compliance audit, PF, ESI and benefits management, payroll management and POSH training and compliance.

The above mentioned areas are the core activities of our company. Parallelly, we are investing a part of business funds (which is generating from the main services) in shares and we are paying lots of share trading charges. The GST amount pertaining to the share trading charges are reflecting in our GSTR-2B.

Can we claim ITC of GST amount which are generating from the share trading and reflecting in our GSTR-2A & 2B.

Please share your expertise with sections and provisions.

[Shilpi Jain]

Presently you are not paying GST on the activity of share trading, since the provisions relating to levy of GST do not cover these transactions.

Hence, no ITC of GST charged on the trading charges can be claimed.

Caution!! This trading activity is to be regarded as an exempt supply and reversal of credit relating to other common expenses will also have to be done in line with the rules.

So GST charged on the common expenses for your regular business and for the trading activity would be liable to be reversed in addition to the fact that any direct expenses to this trading activity, any GST charged, will have to be completely reversed.

Example of some common expenses - telephone charges, internet charges, rental, security, etc.

AI Summary

Input tax credit denial for non-taxable share trading expenses requires reversal of credits on common and direct costs. Input tax credit on GST charged for share trading expenses is not claimable because share trading is not covered by the GST levy and is treated as non-taxable or exempt; GST on direct trading expenses and the trading-attributable portion of common expenses must be reversed under the rules governing apportionment and reversal of credit.