TaxTMI 
TaxTMI 
2022 (11) TMI 260
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in the business of sale of used gold Jewellery (second-hand goods). 3. The applicant has sought advance ruling in respect of the following questions:- i. Whether Applicant who is under Marginal Scheme can claim Input Tax Credit on the expenses like Rent, Advertisement expenses, commission, Professional expenses and other like expenses? ii. Whether ITC is allowed to be claimed on Capital Goods for the Applicant under Marginal Scheme? 4. Admissibility of the application: The question is about the "Admissibility of input tax credit of tax paid or deemed to have been paid" and hence is admissible under Section 97(2) (d) of the CGST Act 2017. 5. BRIEF FACTS OF THE CASE: The applicant furnishes some facts relevant to the issue: 5.1 The applicant states that they are into sale of second hand goods i.e used gold jewellery which they are buying from individuals who falls under the category of unregistered dealers. Hence, they follow "Marginal Scheme" for discharging the GST liability under Rule 32(5) of the CGST Rules 2017 which provides that, where a taxable supply is provided by a person dealing in buying and selling of second hand goods i.e., used goods as ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....invoice or debit note referred to in clause (a) has been furnished by the supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note in the manner specified under section 37 (b) he has received the goods or services or both. [Explanation.- For the purposes of this clause, it shall be deemed that the registered person has received the goods or, as the case may be, services,- (i) where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise; (ii) where the services are provided by the supplier to any person on the direction of and on account of such registered person; (c) subject to the provisions of section 41, the tax charged in respect of such supply has been actually paid to the Government, either in cash or through utilisation of input tax credit admissible in respect of the said supply; and (d) he has furnished the return under section 39: 6.2....
X X X X Extracts X X X X
X X X X Extracts X X X X
....between the selling price and the purchase price and where the value of such supply is negative, it shall be ignored: Provided that the purchase value of goods repossessed from a defaulting borrower who is not registered, for the purpose of recovery of a loan or debt shall be deemed to be the purchase price of such goods by the defaulting borrower reduced by five percentage points for every quarter or part thereof, between the date of purchase and the date of disposal by the person making such repossession. 11.1 Rule 32(5) says that, a taxable supply provided by a person dealing in buying and selling of second hand goods i.e., used goods as such or after such minor processing which does not change the nature of the goods and where no input tax credit has been availed on the purchase of such goods, the value of supply shall be the difference between the selling price and the purchase price. If the value of such supply is negative, then it shall be ignored. We can see that the rule 32(5) clearly bars availment of input tax credit on the purchase of those second hand goods which he is supplying, however there is no restriction on the availment of input tax credit in respec....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Provided that where the goods against an invoice are received in lots or instalments, the registered person shall be entitled to take credit upon receipt of the last lot or instalment: Provided further that where a recipient fails to pay to the supplier of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, the amount towards the value of supply along with tax payable thereon within a period of one hundred and eighty days from the date of issue of invoice by the supplier, an amount equal to the input tax credit availed by the recipient shall be added to his output tax liability, along with interest thereon, in such manner as may be prescribed: Provided also that the recipient shall be entitled to avail of the credit of input tax on payment made by him of the amount towards the value of supply of goods or services or both along with tax payable thereon. (3) Where the registered person has claimed depreciation on the tax component of the cost of capital goods and plant and machinery under the provisions of the Income tax Act, 1961 (43 of 1961), the input tax credit on the said tax component shall not b....