Whether computers, laptops etc. Would qualify as Inputs for the purpose of availing transitional ITC u/s 140(3) of KSGST Act; if the goods are physically available as closing stock on 30.06.2017, can they avail ITC for the VAT paid ?

PJ/Case Law/2020-2021/3564

GEOJIT FINANCIAL SERVICES LTD.2019 (23) G. S. T. L. 423 (App. A. A. R. – GST) dated 14.12.2018
Brief Facts-Appellant is engaged in providing various retail financial services like stock broking, share broking, marketing of IPOs of companies and mutual funds, corporate advisory services etc. which were not taxable under the earlier VAT law - based on transitional provisions, they claimed Input Tax Credit on closing stock of computers, laptops and other goods lying in their physical possession as on 30 th June 2017.
Issue-Whether computers, laptops etc. Would qualify as Inputs for the purpose of availing transitional ITC u/s 140(3) of KSGST Act; if the goods are physically available as closing stock on 30.06.2017, can they avail ITC for the VAT paid ?
Reasoning and Judgement- AAR had held thatcomputers, laptops used for rendering of services are 'capital goods' andstood excluded in terms of section 2(x) of Kerala Value Added Tax Act. The appellant being a service provider is not eligible to avail Input Taxcredit on computers and laptops during the transition period; that provisoto section 140(2) is specific to the point that Input Tax credit, if notavailable under the erstwhile law, cannot be claimed as transitional credit. Also section 140(3) of the GST Act covers "credit of eligible duties inrespect of inputs held in stock as held on the appointed day", therefore, ITC is not eligible for the VAT paid.
The goods even though physically available as closing stock as on 30^th June,2017, ITC is not eligible for VAT paid.
As per section 140(2) of the KSGST Act 2017, a registered person, other than a person opting to pay under Section 10, shall be entitled to take, in his electronic credit ledger, credit Of un-availed input tax credit in respect Of capital goods, not carried forward in a return, furnished under the existing law by him, for the period ending with the day immediately preceding the appointed day in such manner as may be prescribed. Proviso to the said sub-section of the Kerala SGST Act stipulates that the 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 admissible as input tax credit under the Act.
Appellant aggrieved by the order of AAR appealed before AAAR but AAAR confirmed the ruling given by AAR.

Comments

PJ/Case Law/2020-2021/3564

Post a Comment

Query