Tax in India

No. In case of new registrations and voluntary registrations, input tax credit can be availed only on the stock held (inputs, semi-finished goods or finished goods) preceding the day when he is liable to pay tax or preceding to the date of grant of voluntary registration. Therefore, Input service and capital goods lying in stock shall not be eligible for ITC.

(ICAI FAQ PUBLICATION 06-09-2017 -: Availability of Credit in special circumstances: FAQ NO.24)

In terms of Explanation 2(b) to Chapter V of the CGST Rules, 2017, the value of security should be considered as 1% of the sale value of such security.

(ICAI FAQ PUBLICATIONS 06-09-2017 INPUT TAX CREDIT: FAQ NO. 65)

The expression “plant and machinery” has been defined in Explanation to Section 17 for the purpose of Chapter V or VI of the CGST Act. It means apparatus, equipment, and machinery fixed to earth by foundation or structural support that are used for making outward supply of goods or services or both and includes such foundation and structural supports but excludes—
(i) land, building or any other civil structures;
(ii) Telecommunication towers; and
(iii) Pipelines laid outside the factory premises.

(ICAI FAQ PUBLICATION 06-09-2017 -: Apportionment of credit and blocked credits: FAQ NO.23)

1. Input tax credit is not available on goods or services received by a taxable person for construction of an immovable property on his own account other than plant and machinery even when used in course or furtherance of business.
2. The word “construction” includes reconstruction, renovation, additions or alterations or repairs to the extent of capitalization to the said immovable property.
3. If the cost of interiors is capitalized towards the cost of immovable property then it forms part of the cost of immovable property (Service apartment) and accordingly taxes paid on change of interiors of service apartment will not be eligible as input tax credit.

(ICAI FAQ PUBLICATION 06-09-2017 -: Apportionment of credit and blocked credits: FAQ NO.22)

Tax paid w.r.t rent a cab services, life/ health insurance services will be eligible as input tax credit subject to the following conditions:

 If the Government notifies that such services are obligatory for an employer to provide to its employees under any law for the time being in force, or
 Such services are used by a registered person for making an outward taxable supply of the same category of goods or services or both or as part of a taxable composite or mixed supply.

(ICAI FAQ PUBLICATION 06-09-2017 -: Apportionment of credit and blocked credits: FAQ NO.21)