Page 27 - Chap24Computation of GST

Income from services provided to Gujarat 2,50,000 - 22,500 22,500 45,000
Government [Note 12]

Total output tax liability 1,08,000 1,49,750 1,49,750 4,07,500
Less: ITC available for being set off [Note 13, Note 14 (1,07,000) (1,04,450) (80,450) (4,07,500)
and Note 15]
Net GST payable from Electronic Cash Ledger 1,000 45,300 69,300 1,15,600

Notes:
1 Ü As per section 16(1) of the CGST Act, ITC of input tax paid on raw materials used in the

course or furtherance of business is available.
Ü However, ITC is blocked on destroyed inputs as per section 17(5)(h).
2 As per section 16(1) of the CGST Act, ITC on rent paid is available as the said service is used in
the course or furtherance of business.
3 ÜAs per section 16(1) of the CGST Act, ITC on consumables, being inputs used in the course or

furtherance of business is available.
ÜHowever as per section 9(2), levy of GST on diesel has been deferred till such date as may be
notified by the Government on recommendations of the GST Council.
ÜHence, there being no levy of GST on diesel, there cannot be any ITC since VAT & excise paid

are not covered in the definition of input tax.
Ü Moreover, ITC charged on goods & services used in supplying the service of transport of
passengers by any motor vehicle designed to carry passengers where the cost of fuel is
included in the consideration charged from the service recipient, is not available except the
ITC of the input service in the same line of business. Thus, ITC on diesel will not be available.

4 Ü As per section 9(3) of the CGST Act, Tax on security services (services provided by way of
supply of security personnel) provided by a non-body corporate to a registered person is

payable under reverse charge.
Ü Since in the given case, security services have been provided by a body corporate - Safe and
Secure Solutions Pvt. Limited to a registered person - Motopower Pvt. Ltd., GST on the same
is payable under forward charge.
Ü However, since Safe and Secure Solutions Pvt. Limited is not registered under GST, it would
not have charged GST on the said services and hence, no ITC is available.

5 Ü As per section 17(5)(a) of the CGST Act, ITC on motor vehicles for transportation of
persons is allowed, provided such vehicles are further supplied by the supplier.
Ü As per section 17(5)(ab), ITC is allowed on general insurance services relating to motor

vehicles, ITC on which is allowed.
6 ÜAs per Section 17(5)(c) of the CGST Act, ITC is blocked in respect of works contract services
when supplied for construction of an immovable property (other than plant and machinery
except where it is an input service for further supply of works contract service.
Ü Further, the term “plant and machinery” means machinery fixed to earth by foundation or

structural support that are used for making outward supply and includes such foundation
/structural support.
Ü Thus, ITC is available in respect of works contract service availed by Motopower Pvt. Ltd. as
the same is used for construction of plant and machinery which is not blocked.

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