Regarding Confusion in ITC by RENTER.

[JIGNESH SITAPARA]

My client has been issue only rent invoice as a RENTER, and show in GSTR-1 & GSTR-3B also. Now I had taken ITC against services invoices like BSNL, Stationery Expense, CCTV camera installation, computer software etc.....

Now, Can I take all these credit ?

[YAGAY andSUN]

As per the provisions of Section 16(1) of the CGST Act, 2017, input tax credit (ITC) is available to a registered person on goods or services used or intended to be used in the course or furtherance of business. Therefore, the eligibility of ITC is not dependent on the nature of outward supply, but on whether the inward supply is used for business purposes and meets the conditions prescribed under the law.

In your client’s case, although the only outward supply is rental income and invoices are issued accordingly, the client is still engaged in business. Hence, ITC on services like BSNL (telecom), stationery, CCTV installation, computer software, etc., can be availed, provided the following conditions are satisfied:

1. The goods or services are used for business purposes, not personal use.

2. Tax invoices are in your client’s GSTIN and name.

3. The supplier has uploaded the invoice in their GSTR-1, and the same reflects in GSTR-2B of your client.

4. Your client is in possession of valid tax invoices and has made payment to the supplier within 180 days.

5. Not blocked under Section 17(5) of the CGST Act.

There is no legal restriction that limits ITC based on the number or type of outward supplies. Even if your client has a single rental income stream, so long as the input services are used in relation to managing, maintaining, or operating the business premises or related administrative functions, the ITC can be rightfully claimed.

Therefore, based on settled legal provisions, your client can take ITC on such business-related expenses if all eligibility criteria are met, and the inward supplies are not falling under blocked credit. Proper documentation and reconciliation with GSTR-2B must be ensured.

[JIGNESH SITAPARA]

Thank you very much.

AI Summary

Renter can claim Input Tax Credit under Section 16(1) CGST Act 2017 for business expenses regardless of outward supply nature A tax consultant inquired whether a client operating solely as a renter can claim Input Tax Credit (ITC) on business expenses like telecom, stationery, CCTV installation, and software services. The respondent clarified that under Section 16(1) of CGST Act 2017, ITC eligibility depends on business use rather than the nature of outward supply. Since the renter operates a business, ITC can be claimed on services used for business purposes, provided standard conditions are met: proper tax invoices, supplier compliance with GSTR-1 filing, payment within 180 days, and services not blocked under Section 17(5). The legal position confirms no restriction exists limiting ITC based on outward supply types.