The Telangana Authority of Advance Ruling (AAR) held that Input Tax Credit (ITC) is not allowed to be claimed if concessional rate of 5% GST is opted.
The applicant, M/s. Sri Krishna Logistics is in the business of transportation of goods as a GTA. They have stated that they are desirous of starting business of transportation of passengers in Telangana State by deploying Air Conditioned buses as Stage carriages. They have stated in the application that there is ambiguity regarding applicability of rate of tax for their proposed business with respect to Sl.No.8(ii) and 8(vi) of Notification 11 of 2017.
The applicant has sought advance ruling on the issue whether the rate of GST of 5% (2.5% each towards CGST & SGST) as per Sl.No.8(ii)(b) of Notification No.11/2017-Central Tax (Rates), dt: 28-06-2017 with the condition that input tax credit is not allowed on goods and services. Whether input tax credit on inward supply of services received from the suppliers who are in the same line of business as this condition is not mentioned against the said serial no.
The coram of Raghu Kiran and S.V. Kasi Visweswar Rao held that ITC is not allowed to be claimed if concessional rate of 5% GST is opted to be paid on service supplied under Sl.No.8(ii)(b) of Notification No.11/2017. Input tax credit is not allowed on any goods or services received by the applicant if tax is paid at the rate of 5% GST.
“There is no exclusion of services from other taxable persons in the same line of business from this condition, as the entry clearly mentions that ITC should not be taken on “Goods & Service used in supplying the service”. Therefore if they are recipient of services from other suppliers who are in the same line of business and would like to claim a lower rate of tax under Sl.No.8(ii)(b), they cannot claim the credit of input tax charged on services from these other suppliers of similar service,” the AAR observed.
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