Eligibility of ITC in case of different POS

[DAMINI TALWAR]

I am recipient registered in Delhi received services of Renting of Immovable Property from the supplier registered in Mumbai and location of the property is in Haryana. The supplier will charge IGST on this supply, as a receipient am I available to take ITC ?

[YAGAY andSUN]

In the present case, the recipient is a registered person under GST in the State of Delhi, who has received the service of "Renting of Immovable Property" from a supplier registered in the State of Maharashtra, in respect of an immovable property located in the State of Haryana.

As per the provisions of Section 12(3)(a) of the Integrated Goods and Services Tax Act, 2017, in the case of services directly in relation to immovable property, including renting of immovable property, the place of supply shall be the location of the immovable property, i.e., Haryana. The location of supplier being Maharashtra and the place of supply being Haryana, the supply qualifies as an inter-State supply within the meaning of Section 7(1) of the IGST Act, and hence, the supplier is liable to charge IGST on such transaction.

With respect to eligibility to avail input tax credit (ITC), Section 16(1) of the Central Goods and Services Tax Act, 2017 permits a registered person to avail credit of input tax charged on any supply of goods or services or both, which are used or intended to be used in the course or furtherance of his business. Further, Section 2(62) of the CGST Act defines "input tax" to include tax charged under the provisions of the IGST Act.

In the instant matter, the recipient, though not registered in the State where the immovable property is situated, is receiving the supply in the course or furtherance of business, and the tax levied is in the form of IGST, which is not restricted to be availed within the same State, unlike CGST and SGST.

Accordingly, as the tax paid by the supplier is IGST, and the recipient satisfies the conditions laid down under Section 16 of the CGST Act, there is no statutory bar on availing input tax credit merely on the ground that the property is situated in a different State than that of the recipient’s registration.

Conclusion: The recipient registered in Delhi is legally entitled to avail input tax credit of IGST paid on the service of renting of immovable property situated in Haryana, provided that all conditions for availment of ITC under Section 16 of the CGST Act, 2017 are duly complied with.

[Sadanand Bulbule]

 Also refer Issue Id: - 119975 Dated: 6-5-2025 for more details.

[KASTURI SETHI]

In this scenario, ITC of IGST is admissible. 

[Shilpi Jain]

Logically speaking this is a tax which goes to Haryana Govt. and you are trying to claim ITC of that tax to pay tax to Delhi Govt.

AI Summary

Inter-State Service Rental Transaction Allows Input Tax Credit When Statutory Conditions Under Section 16 Are Fully Satisfied A registered taxpayer in Delhi received renting services for a property in Haryana from a supplier in Mumbai. The transaction involves an inter-state supply, with IGST being charged. Based on legal provisions, the recipient is eligible to claim input tax credit (ITC) of IGST, provided all conditions under Section 16 of CGST Act are met, as the service is used in the furtherance of business.