In Re: M/s. Geojith Financial Services Ltd.
GST
2018 (10) TMI 513 – AUTHORITY FOR ADVANCE RULINGS, KERALA – 2018 (18) G. S. T. L. 154 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULINGS, KERALA – AAR
Dated:- 19-9-2018
AAR No. KER/13/2018
GST
SHRI. B.G. KRISHNAN AND SHRI. B.S. THYAGARAJABABU MEMBER
Authorized Representative: Adv. Jose Jacob
The applicant is engaged in providing various retail financial services like stock broking, share broking, marketing of initial public offering of companies and mutual funds, corporate advisory services etc. which were not taxable under VAT Law. Based on the transitional provisions, they have claimed input tax credit on closing stock of computers, laptops and other goods lying in the physical possession of the applicant as on 30th June 2017. In the circumstances advance ruling is sought for on the following:
i) Whether computers, laptops etc. used by the applicant for providing output service would qualify as inputs for the purpos
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added tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the appointed day subject to the condition that:
(i) such inputs or goods are used or intended to be used for making taxable supplies under this Act;
(ii) the said registered person is eligible for input tax credit on such inputs under this Act;
(iii) the said registered person is in possession of invoice or other prescribed documents evidencing payment of tax under -the existing law in respect of such inputs; and
(iv) such invoices or other prescribed documents were issued not earlier than 12 months immediately preceding the appointed day.
The issue was examined in detail. The applicant being a service provider had no tax liability under VAT regime. As per the proviso to Sub-Section (2) of Section 140 of the GST Act, a registered person shall not be allowed to take credit unless such credit was admissible as input tax credit under the existing law and is also
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Sub-Section (2) of Section 140 of the GST Act, is specific to the point that input tax credit not admissible as under the existing law is ineligible to claim input tax credit under GST Act. Section 140(2) of the Act covers transitional credit claim on capital goods by a dealer registered in earlier law.
Section 140(3) of the GST Act covers “credit of eligible duties in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the appointed day”, hence, the transitional credit claim of the assessee in respect of capital goods is not acceptable.
In view of the observations stated above, the following rulings are issued:
i) The computers, laptops etc. used by the applicant for providing output service would not qualify as inputs for the purpose of availing transitional ITC under Section 140(2) /140(3) of the KSGST Act.
ii) The goods, even though physically available as closing stock as on 30th June 2017, ITC is not eligible for the VAT
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