TaxTMI 
TaxTMI 
GST-ITC on expenses in connection with Initial Public Offer (IPO)
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....ST-ITC on expenses in connection with Initial Public Offer (IPO)<br> Query (Issue) Started By: - VENKATASUBRAMANIAN VENKATACHALAM Dated:- 10-1-2024 Last Reply Date:- 20-1-2024 Goods and Services Tax - GST<br>Got 5 Replies<br>GST<br>Is Input Tax Credit under GST on expenses in connection with IPO allowed? Department has been issuing notices denying ITC calling it as exp in connection with trading o....
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....n shares. Do we have any case law either under GST or previous regim? Reply By KASTURI SETHI: The Reply: Dear Querist, Can you post relevant portion (major) of the Notice issued here ? It is necessary for correct reply. Reply By Amit Agrawal: The Reply: Raising of capital (through IPO) is part of any business, in terms of clause (b) of Section 2(17). And expenses incurred in connection with....
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.... IPO are in the course or furtherance of the business and thereby, tax-payer can take ITC there-against u/s 16(1) IMHO. Issuance of own shares a Co. through IPO cannot be called as 'trading in securities'. These are ex facie views of mine and the same should not be construed as professional advice / suggestion. Reply By KASTURI SETHI: The Reply: Dear Querist, You have not replied to ....
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....my request. I want relevant portion of SCN. Reply By Amit Agrawal: The Reply: In continuation of my last post, attention is invited to relevant portion of Section 17(3) which reads as follows: "The value of exempt supply under sub-section (2) shall be such as may be prescribed, and shall include supplies on which the recipient is liable to pay tax on reverse charge basis, transactions in ....
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....securities, sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building ..............." Relevant portion of 'Explanation' given under Rule 45 of the CGST Rules, 2017 reads as follows: "Explanation.- For the purposes of this Chapter,- (1) ...................... (2) for determining the value of an exempt supply as referred to in sub-section (3) of s....
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....ection 17- (a) ....................... (b) the value of security shall be taken as one per cent. of the sale value of such security." IMHO, issuance of own shares by a Co. while raising capital through IPO cannot be called as 'selling securities'. These are ex facie views of mine and the same should not be construed as professional advice / suggestion. Reply By Shilpi Jain: The....
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.... Reply: Credit should be eligible. It is an expense incurred to raise capital<br> Discussion Forum - Knowledge Sharing ....