Whether ITC is available when goods are held by supplier as bailee, Goods and Services Tax - GST

[SOVIT GARG]

I have purchased ascertained goods from the supplier after making consideration and due to shortage of space in godown of the recipient, the supplier retains the goods as bailee. The supplier filed its return and shown supply of the goods in his GSTR-1 and 3B. Whether the recipient is eligible for ITC without receipt of goods (where goods are held by supplier as bailee) in terms of section 16(2)(b)(i) of CGST Act?

Posts / Replies

[KASTURI SETHI]

In my view, ITC is allowed. The ownership the said goods is with you. The bailee is not owner of the goods. The bailee is the custodian of the goods for the time being. He is just taking care of the goods. You are covered under the phrase, "or otherwise" for eligibility.

(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.

[SHARAD ANADA]

In my view you can cannot take ITC ,as Goods are not delivered by the supplier to the recepient 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.

In my view here Supplier can not be considered as any other person. Here any other person should be read as person other than supplier and recepient.

[KASTURI SETHI]

As per Section 2 (93) of CGST Act, 2017 “recipient” of supply of goods or services or both, means -

(a) where a consideration is payable for the supply of goods or services or both, the person who is liable to pay that consideration;

(b) where no consideration is payable for the supply of goods, the person to whom the goods are delivered or made available, or to whom possession or use of the goods is given or made available; and

(c) where no consideration is payable for the supply of a service, the person to whom the service is rendered,

and any reference to a person to whom a supply is made shall be construed as a reference to the recipient of the supply and shall include an agent acting as such on behalf of the recipient in relation to the goods or services or both supplied;