Page 38 - DTPA Journal Aug 18

DTPA - J | 2017-18 | Volume 3 | August 2018

amending the provisions of the Constitution. ANALYSIS:
Example: Activities referred to in Schedule III or any On plain reading of provisions of section 16(2), there
activity which is included in the state list or any a re no issues regarding claim of ITC. But when it is read
supply where the place of supply is outside India. with section 2(33), an issue arises as to the point of time
Even supplies made before 1st July, 2017 are non when a service can be treated as received for becoming
GST Supplies as because even the Parliament does eligible to claim ITC under Section 16(2). There is no
not have the power to levy tax on these supplies. As issue in the receipt of goods as it has physical
such, the supplies made before 1st July, 2018 should existence. Even in a continuous supply of goods, the
not be considered for calculating the 'aggregate receipt of goods can be quantified, whether the goods
turnover' of the financial year 2017-18. are delivered to the recipient or to a third person on the
directions of the recipient, and ITC can be taken
REQUEST:
accordingly. But in a continuous supply of services,
Please inform if there is any difference of opinion. quantification of receipt of service is not possible
PROVISION: because it has no physical existence. What is the
mechanism for quantifying the receipt of service for
Section 16(2)
claiming ITC?
Notwithstanding anything contained in this section, no
EXAMPLE:
registered person shall be entitled to the credit of any
input tax in respect of any supply of goods or services or A registered person pays insurance premium for
both to him unless,–– insurance of his factory. The insurance company issues
the invoice along with the money receipt at the
(a) he is in possession of a tax invoice or debit note beginning of the period as soon as the premium is paid
issued by a supplier registered under this Act, or such
but the service spreads over a period of, generally, one
other tax paying documents as may be prescribed;
year. Similarly if a person gives a contract of AMC for
(b) he has received the goods or services or both. computers installed in his office, the contractor issues
Section 2(33): the invoice at the beginning of the period. In both the
cases, the registered person receives the invoice at the
“continuous supply of services” means a supply of
beginning of the contract period. He has to fulfill the
services which is provided, or agreed to be provided, condition of receiving the service before claiming ITC.
continuously or on recurrent basis, under a contract, for
When will he be deemed to have received the service.
a period exceeding three months with periodic payment
Can he claim that he has received the service at the
obligations and includes supply of such services as the beginning of the period and claim full ITC charged to
Government may, subject to such conditions, as it may,
him on such services?
by notification, specify;

35 | Direct Taxes Professionals' Association - Journal www.dtpa.org