Page 28 - Chap24Computation of GST

7 Ü As per section 16(1) of the CGST Act, Audit fee are the services used in the course/furtherance

of business and thus, credit of input tax paid on such service will be available.
Ü M/s Pandya & Associates is required to issue an e-invoice for audit services as -invoicing is
mandatory for the registered persons whose aggregate turnover in any of the preceding
financial years from 2017-18 onwards exceed ₹ 5 crores.
Ü However, an e-invoice without IRN is not treated as an invoice as per rule 48(5) and hence,

without a valid document, ITC cannot be claimed on such input services.
8 ÜAs per section 16(1) of the CGST Act, Bank charges are services used in the course/
furtherance of business and thus, credit of input tax paid on such service will be available.

Ü However, ITC can be claimed only on the basis of valid documents.
Ü In case of a banking company, as per rule 54(2), a consolidated tax invoice issued for supply
of services made during a month at the end of the month containing the details of tax
charged, description of services, total value, GSTIN of the supplier and the recipient is
deemed to be a tax invoice.

Ü Thus, ITC pertaining to the banking services received is allowed.
9 ÜAs per section 17(5)(b)(ii) of the CGST Act, ITC is blocked on membership of a club, health
and fitness centre.
Ü The membership fee paid by a automobile company to Automobile Association is not covered

under said section as it is distinct from membership of a club. Hence, ITC thereon is
available.
10 As per section 16(1)(a) of IGST Act 2017, Export of goods is a zero-rated supply & A zero rated
supply can be supplied without payment of tax under LUT as per section 16(3)(a) of that Act.

11 ÜAs per section 9(3) of the CGST Act, Tax on services provided by way of renting of any motor
vehicle designed to carry passengers where the cost of fuel is included in the consideration
charged from the service recipient is payable under reverse charge only when said service is
provided by a non-body corporate to a body corporate and & an invoice charging GST @ 12%

is not issued to service recipient.
Ü Since in the given case, said services are provided by a body corporate - Motopower Pvt. Ltd.
to another body corporate – Jamaze Travels Ltd., GST is payable under forward charge by
Motopower Pvt. Ltd. on the same.

12 ÜServices provided to the Central Government, State Government, Union territory
administration under any training programme for which 75% or more of the total
expenditure is borne by the CG, SG, UT administration are exempt from GST.
Ü However, in the given case, since the total expenditure borne by the Gujarat Government is

less than 75%, services provided to it by Motopower Pvt. Ltd. are liable to GST.
13 As per Section 16 of the IGST Act read with section 17(2) of the CGST Act, Since export of goods
is a zero-rated supply, apportionment of ITC is not required and instead, full credit will be available.
14 As per section 49(5) read with rule 88A of the CGST Act 2017, ITC of-

Ü IGST is utilised towards payment of IGST first and then CGST and SGST in that order.
Ü CGST is utilised towards payment of CGST first and then IGST. ITC of CGST shall be utilized
only after ITC of IGST has been utilised fully.
Ü SGST is utilised towards payment of SGST first and then IGST. ITC of SGST shall be utilized

only after ITC of IGST has been utilised fully.

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