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TMI BlogInput Credit Utilisation for set off of taxable services provided by educational institutionsX X X X Extracts X X X X X X X X Extracts X X X X ..... Input Credit Utilisation for set off of taxable services provided by educational institutions X X X X Extracts X X X X X X X X Extracts X X X X ..... rent is a taxable event and hence taxable under GST. My question is whether the said Institution can avail any ITC in its account to set off the liabilty for payment of GST on rent. Reply By Nitika Aggarwal: The Reply: From whom this educational institution gets the rent? Reply By Alkesh Jani: The Reply: Sir, The ITC is governed by Chapter-V of CGST Act. The Section 16(1) of CGST Act,2017 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s as under :- ""16. (1) Every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit ledger of such person". From above, if you are registered under GST Act, you are eligible for ITC, subject to conditions and restriction. Moreover, Section 49 (4) of CGST Act, 2017 reads as under:- "(4) The amount available in the electronic credit ledger may be used for making any payment towards output tax under this Act or under the Integrated Goods and Services Tax Act in such manner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and subject to such conditions and within such time as may be prescribed" On conjoint reading, I am of the view that, you can utilize the ITC for output tax, i.e. other than tax payable under RCM. Our experts may correct me if mistaken. Thanks Reply By Rajat Singhania: The Reply: Hi Nitika, The rent is received from a pvt. ltd. company Reply By Rajat Singhania: The Reply: Hi Alkesh, I ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the same view until I read an article issued by CBEC which mentions that, for educational institutions, " Regarding, input services, it may be noted that where output services are exempted, the Educational institutions may not be able to avail credit of tax paid on the input side.'' The question that comes to mind here is, for Educational Institutions, where the primary activity i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s education services provided to students (which are exempt), how to distinguish the input received as one coming for exempt services and the other for taxable services. Reply By Nitika Aggarwal: The Reply: As per section 16 of CGST Act, 2017, the registered person is eligible to take the input of goods or services which are used for providing taxable output services subject to the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 17(5) of CGST Act, 2017 (i.e. block credit). Thus, as per the facts available to us, educational institution is eligible to take the ITC of goods or services which are used for the provision of taxable output services i.e. renting of commercial building. For the sake of your knowledge, it is essential to highlight that renting of residential dwelling is outside the purview of CGST Act, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 017 by way of Notification No. 12/2017-Central Tax (rate). Since, you are not covered under the ambit of aforesaid notification, thus you are not eligible for the aforementioned exemption. Further, the amount of ITC available in the electronic ledger of the registered person shall be utilized in accordance with the provisions of section 49(5) of CGST Act, 2017. CA Nitika Aggarwal 9953157961 Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ply By Alkesh Jani:
The Reply:
Sir, Please refer Rule 42 of CGST Rule, 2017 for your query.
Reply By YAGAY and SUN:
The Reply:
We endorse the very view of the experts.
Reply By Alkesh Jani:
The Reply:
Sir, I regret for typing error, Please read as "Please refer to Rule 42 of CGST Rules,2017.
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