Input Credit Utilisation for set off of taxable services provided by educational institutions
Query (Issue) Started By: – Rajat Singhania Dated:- 23-5-2018 Last Reply Date:- 24-5-2018 Goods and Services Tax – GST
Got 8 Replies
GST
Dear Panel,
An educational institution registered under Section 12AA receives rent on building provided by it for accomodating its students. The receipt of 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
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towards output tax under this Act or under the Integrated Goods and Services Tax Act in such manner 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 had 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
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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, 2017 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
Reply 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
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