Page 18 - Ch_10 ITC

2 Purchase of accessories which were delivered directly to the dealers of the company on the 90,000
direction of Dina Ltd. [Only invoice was received by Dina Ltd.]

3 Purchase of bus (seating capacity 15) for the transportation of employees from their 1,97,000
residence to company and back
4 General insurance taken on a car used by executives of the company for official purposes 5,200
5 Machinery purchased to be used in the manufacturing process of auto parts 3,00,000

6 Inputs purchased, but stolen from the factory 1,40,000
7 Rent-a-cab facility availed for employees to fulfil a statutory obligation 36,000
8 Outdoor catering services taken for a Meeting organised in the factory 10,000

9 Payment made for material and to contractor for construction of staff quarter 1,25,000
10 Input purchased was directly delivered to Mr. Joe, a job worker and a registered supplier 80,000
You are required to determine the ITC available with Dina Ltd. for the month of March, by giving brief
explanations for treatment of various items. Subject to the information given above, all the other
conditions necessary for availing ITC have been fulfilled. [Study Mat with little additions] [CA Inter

May 19 Exam (Similar)]
Answer:-
Computation of ITC available with Dina Ltd. for the month of March:-

S.No. Items (`) Explanation
1 Purchase of iron which is Nil 1st proviso to section 16(2) of CGST Act states that if goods
used as a raw material against an invoice are received in instalments, ITC can be availed
only on the receipt of last instalment. Since last instalment is
received in April, ITC cannot be availed in March.

2 Purchase of accessories 90,000 As per explanation to section 16(2)(b), goods delivered to a
delivered directly to third person on direction of registered person are deemed to
dealers of company have been received by such registered person. So, ITC is available
to registered person even though he did not receive the goods.

3 Bus for transportation 1,97,000 ITC is not blocked u/s 17(5)(a) of CGST Act on motor vehicles for
of employees transportation of persons with seating capacity more than 13
persons (including driver) used for any purpose.
4 General insurance taken on Nil As per section 17(5)(ab) of CGST Act, ITC is blocked on general
car used by executives of insurance of those motor vehicles on which ITC is blocked u/s
company forofficial 17(5)(a). In this case, ITC on car is blocked u/s 17(5)(a) as it's

purpose seating capacity less than 13 & not used for purpose mentioned in
exceptions & thus, ITC is blocked on general insurance of car also.

5 Machinery purchased to be 3,00,000 ITC is available on goods used or intended to be used in the course
used in the manufacturing or furtherance of business u/s 16(1) of CGST Act.
process of auto parts
6 Inputs purchased, but Nil ITC is blocked on goods stolen as per 17(5)(h) of CGST Act.
stolen from factory

7 Rent-a-cab facility availed 36,000 ITC is not blocked u/s 17(5)(b) of CGST Act on rent-a cab services
for employees to fulfil a where the government notifies services which are obligatory for an
statutory obligation employer to provide to its employees.

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