Page 5 - Ch_10 ITC

suppliers in their respective GSTR-1 filed on the prescribed due date thereof. [CA IPC Jan 21 Exam]
Answer:

Computation of ITC that can be claimed by Laxmi Traders in his GSTR-3B for the month of November,
20XX:
Situation 1:-

Invoices ITC as per invoices(`) ITC that can be availed(`)
160 invoices uploaded in GSTR-1 7,00,000 7,00,000 [Note 1]
40 invoices not uploaded in GSTR-1 1,00,000 Nil [Note 2]
Total ITC that can be claimed 8,00,000 7,00,000

Situation 2:
Invoices ITC as per Invoices (₹) ITC that can be availed (₹)
140 invoices uploaded in GSTR-1 5,00,000 5,00,000 [Note 1]
60 invoices not uploaded in GSTR-1 3,00,000 Nil [Note 2]
Total ITC that can be claimed 8,00,000 5,00,000

Notes:-
1) Full ITC can be availed on the invoices uploaded by the suppliers in their GSTR-1s u/s 16(2)(aa) read with
rule 36(4).

2) ITC on invoices which are not uploaded by the suppliers in their GSTR-1s is restricted fully u/s 16(2)(aa)
read with rule 36(4).

Sec 16(2)(b):- Goods &/or Services must be received to avail ITC & Bill to-Ship to model
CCP 10.02.04.00
Sigma Consultants, an LLP of finance professionals, provides financial consultancy services. It made an
advance payment of ₹ 1,18,000 (inclusive of IGST @18%) in the month of October to Azuro Computer

Services for developing a software. The software would be used by the LLP to enhance the precision of
the financial advice given by it to various clients. The balance payment is to be made after the successful
test run of the software in the month of December. Sigma Consultants has availed ITC of IGST of ₹
18,000 in the month of October.

Do you think Sigma Consultants can avail such ITC? Examine the scenario with reference to the
relevant legal provisions. [Study Mat]
Answer:
Legal Provision:-

Ü As per section 16(2)(b) of CGST Act, tax paid on supply of goods and/or services can be availed as ITC only
if such goods and/or services are received by the registered person.
Discussion & Conclusion:-
Ü In the given case, Sigma Consultants has paid IGST of ₹18,000 in the month of October, on advance for IT
services intended to be used in the course or furtherance of business.

Ü However, it cannot avail ITC of such tax in October as the services in relation to which the advance
payment has been made have not been received in that month.

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