Fact: M/s. Adwitya Spaces Private is engaged in the business of letting out property and is in receipt of rental income. They have let out one of the properties to M/s. Vantec Logistics India Private Limited which was arranged by a property consultant “M/s. Catalyst Consulting Chennai”, who is registered under GST. However, an invoice C-007/17-18 dated December 20, 2017 was raised by Catalyst Consulting towards Brokerage charges for warehouse building leased to M/s. Vantec logistics India Private Limited. Further the applicant submitted that the tax of CGST & SGST paid by them on brokerage charges falls under “input tax” under Section 2(62) of CGST Act and is not covered under any restrictions under Section 17(5) (c) or (d) and hence are eligible to take input tax credit.
Issue Involved: Whether they are eligible to take Input Tax Credit of the CGST & SGST charged by M/s Catalyst Consulting Chennai in respect of brokerage services and adjust the same against output tax payable against Renting of immovable property.
Held: The Hon’ble AAR of Tamil Nadu vide Advance Ruling Order No. 13/AAR/2018 dated September 27, 2018 stated that the applicant has received an inward supply of real estate brokerage services for renting of property on a fee basis. Due to the services of Catalyst Consulting Chennai, the applicant was able to make an outward supply of renting of the property to Vantec Logistics India Private Limited. This inward supply rendered by catalyst Consulting is not listed in any of the exceptions mentioned in Section 17(5) of CGST Act/ SGST Act for availing the input tax credit of CGST and SGST.
Further, Section 16(2) states that input tax credit is available only if the registered person is in possession issued by registered supplier i.e. supply of the service has been received; tax has been paid by supplier to Government; the recipient (applicant) has filed returns; recipient has paid the supplier the amount within a period of 180 days. Section 16(4) states that the recipient (applicant) shall not be entitled to take input tax credit after the due date of furnishing return for September following the end of financial year or annual return whichever is earlier. Similarly, Section 17 and Section 18 impose certain conditions on availment of input tax credit.
Therefore, the applicant is eligible to take credit of the CGST & SGST charged by M/s. Catalyst Consulting Chennai in the Tax invoice No. C-007/17-18 dated December 20, 2017 raised on the applicant for real estate brokerage services for renting of property on a fee basis rendered by Catalyst Consulting, subject to the conditions as per Section 16, 17 and 18 of CGST & SGST Act.
Citation: http://insta.instavat.in/PDF/TAMILNADU-ADVANCE-RULING-13.pdf