Whether a registered person can claim ITC paid on CGST & SGST of other states where he is not registered?

Yes, a registered person under GST can claim the Input Tax Credit (ITC) of CGST and SGST paid on purchases made in other states where the person is not registered, subject to certain conditions.

As per Section 16(1) of the Central Goods and Services Tax (CGST) Act, 2017, a registered person can claim the ITC of CGST and SGST paid on goods or services used or intended to be used in the course or furtherance of his business. There is no specific condition that restricts a registered person from claiming the ITC of CGST and SGST paid on purchases made in other states where he is not registered.

However, as per Section 16(2)(a) of the CGST Act, the registered person should be in possession of a tax invoice or debit note issued by a supplier registered under GST. The tax invoice or debit note should contain all the prescribed details as per Rule 46 of the CGST Rules, 2017. The registered person should also have received the goods or services for which the ITC is being claimed.

Furthermore, the ITC of IGST paid on inter-state purchases can be set off against the output tax liability of any state, and there is no restriction on the place of utilization of such ITC. However, for the ITC of CGST and SGST paid on inter-state purchases, the registered person can only claim the ITC in the state where he is registered and where the goods or services are received.

In summary, a registered person can claim the ITC of CGST and SGST paid on purchases made in other states where he is not registered, subject to the conditions mentioned above.

ITC paid on CGST & SGST

Input Tax Credit (ITC) is the credit that a registered person can claim for the taxes paid on inputs used in the course or furtherance of business. This credit can be claimed for both Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST) paid on purchases.

When a registered person purchases goods or services, the supplier charges GST, which comprises of CGST and SGST. The registered person can claim the ITC of CGST and SGST paid on such purchases, provided the goods or services are used or intended to be used for the business.

For example, let's say a registered person purchases goods worth Rs. 10,000 from a supplier. The supplier charges 18% GST, comprising of 9% CGST and 9% SGST. The registered person pays Rs. 1,800 as GST, which includes Rs. 900 as CGST and Rs. 900 as SGST. The registered person can claim the ITC of Rs. 1,800 as he has paid the tax on inputs used in the course or furtherance of business.

The ITC of CGST and SGST can be utilized for payment of output tax liability of CGST and SGST respectively. For instance, if the registered person sells goods or services for Rs. 12,000 and charges 18% GST, comprising of 9% CGST and 9% SGST, then he would need to pay Rs. 2,160 as GST. In this case, the registered person can set off the ITC of Rs. 1,800 against the output tax liability of CGST and SGST and pay only the balance amount of Rs. 360.

It is important to note that there are certain conditions for claiming the ITC of CGST and SGST. The registered person should be in possession of a valid tax invoice or debit note issued by a supplier registered under GST, and the goods or services should have been received. Additionally, the registered person should have filed his GST returns in a timely manner.

Here are some additional points to consider regarding claiming ITC on CGST and SGST paid on purchases made in other states where a registered person is not registered:

The registered person should have proof of the inter-state purchase, such as an invoice or other relevant documents.
The tax invoice or debit note issued by the supplier should contain the GSTIN of the supplier and the recipient, the date of issue, a consecutive serial number, the description of goods or services, the value of goods or services, the amount of tax charged and other prescribed details as per Rule 46 of the CGST Rules, 2017.
The registered person can claim ITC on the CGST and SGST components of the tax paid on the inter-state purchases only if he is engaged in the same line of business as the supplier who has charged the tax.
The registered person should make sure that the ITC claimed is reconciled with the supplier's GST return and that the supplier has deposited the tax with the government.
The registered person should ensure that he has paid the tax due on his output supplies, as only then he will be eligible to claim ITC on his input supplies.

Conclusion

In summary, a registered person can claim ITC on CGST and SGST paid on inter-state purchases made in other states, provided the necessary conditions are met, and the appropriate documentation is maintained. It is always advisable to seek professional advice to ensure compliance with GST laws and regulations.