2019 (1) TMI 1492 - AAR - GST

Input Tax Credit - inward supply - distinct persons - Place of Provision of Services - Can a person, registered in WB, claim ITC for CGST and SGST of other states? - adjustment of ITC of one state s CGST for payment of another state s CGST - adjustment of ITC of Tamil Nadu GST for payment of IGST, whereas he is not registered in Tamil Nadu - Held that - In this case, the location of the supplier, providing hotel, banquet hall or restaurant in Tamil Nadu and the location of the recipient i.e. the Applicant, receiving the service, is also Tamil Nadu. So, the Applicant can avail ITC on the said invoices in Tamil Nadu only, if registered in Tamil Nadu. In no case, the Applicant can claim/adjust/avail ITC outside Tamil Nadu on the said invoices, even if the invoices are issued as B2B mentioning the Applicant s GSTIN in West Bengal - As input tax and its credit are always linked with whether the person is registered or not, the two components of GST paid on inward intra-state supply in Tamil Nadu could have been taken credit of, if only registration is taken in Tamil Nadu under Section 25(1) of the GST Act and is regarded as distinct person within the meaning of Section 25(4) of the GST Act. As the Applicant is not registered under section 25(1) in Tamil Nadu, the SGST and CGST paid on intra-state inward supply in Tamil Nadu are not input tax to the said person. The GST Act does not contain any concept of input tax to an unregistered person. No credit of it is, therefore, admissible under the GST Act. Ruling - The Applicant is not registered under Section 25(1) of the CGST Act in Tamil Nadu. The SGST and CGST paid on intra-state inward supply in Tamil Nadu are not, therefore, input tax to the Applicant. The GST Act does not contain any concept of input tax in relation to an unregistered person. No credit of it is, therefore, admissible under the GST Act. A person, registered in WB, cannot claim ITC for CGST & SGST of other states. He cannot adjust the ITC of one state s CGST for payment of another state s CGST. He cannot adjust the ITC of Tamil Nadu GST for payment of IGST, whereas he is not registered in Tamil Nadu.

Issues:
1. Claiming Input Tax Credit (ITC) for CGST and SGST of other states
2. Adjusting ITC of one state's CGST for payment of another state's CGST
3. Adjusting ITC of Tamil Nadu GST for payment of IGST without registration in Tamil Nadu

Analysis:

Issue 1: Claiming Input Tax Credit (ITC) for CGST and SGST of other states
The Applicant, a supplier of Event Management Services in multiple states, sought an Advance Ruling on the admissibility of claiming ITC for CGST and SGST paid on invoices from states where they are not registered. The Authority clarified that under the GST Act, ITC can only be claimed in the state where the recipient is registered. The location of the supplier and recipient determines the place of supply, impacting the levy of tax and ITC availability. In this case, since the Applicant is not registered in Tamil Nadu where the services were provided, they cannot claim ITC on CGST and SGST paid in Tamil Nadu.

Issue 2: Adjusting ITC of one state's CGST for payment of another state's CGST
The Applicant inquired about adjusting ITC of one state's CGST for payment of another state's CGST. The Authority explained that the GST Act does not allow cross-utilization of ITC between different states. Each state registration is treated as a distinct entity, and ITC cannot be transferred between them. Therefore, the Applicant cannot adjust ITC of one state's CGST for payment of another state's CGST.

Issue 3: Adjusting ITC of Tamil Nadu GST for payment of IGST without registration in Tamil Nadu
The Applicant questioned whether they could adjust ITC of Tamil Nadu GST for payment of IGST despite not being registered in Tamil Nadu. The Authority ruled that as per the GST Act, unregistered persons cannot claim ITC. Since the Applicant is not registered in Tamil Nadu, the SGST and CGST paid in Tamil Nadu do not qualify as input tax for the Applicant. Therefore, they cannot adjust the ITC of Tamil Nadu GST for payment of IGST without registration in Tamil Nadu.

In conclusion, the Authority ruled that the Applicant cannot claim ITC for CGST and SGST of other states, adjust ITC of one state's CGST for payment of another state's CGST, or adjust the ITC of Tamil Nadu GST for payment of IGST without being registered in Tamil Nadu. The ruling is valid unless declared void under the provisions of the GST Act.

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