Question

XYZ is supplying goods where Bill To is outside India but Ship To is to PQR within India. Can PQR avail input tax credit based on invoice issued by XYZ?

Answer

The credit to PQR is available if the conditions given in Section-16 of the CGST Act,2017 are complied. These conditions are as follows.

a) he is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying documents as may be prescribed;

b) he has received the goods or services or both.

c) subject to the provisions of section 41 or section 43A, the tax charged in respect of such supply has been actually paid to the Government, either in cash or through utilisation of input tax credit admissible in respect of the said supply and

d) he has furnished the return under section 39.

In your case invoice is not issued in favour of PQR therefore ITC of PQR will be disallowed. The PQR is not receiver of supply. The receiver of supply is located outside india. (Reply dt.09/05/2019)