GST Paid in respect of Brokerage Services can be adjusted against Output Tax payable on Renting of Immovable Property: AAR [Read Order]

The Authority for Advance Ruling (AAR), Tamil Nadu held that Input Tax Credit of the CGST & SGST charged in respect of brokerage services can be adjusted against output tax payable against Renting of immovable property.

In the instant case, 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. Hence, this inward supply was used in the course of the applicant’s business.

The authority noted that the 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; a 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 eligible to take credit of the CGST & SGST charged by M/s. Catalyst Consulting in the Tax invoice No. COO7 /17-18 dated 2O-Dec-17 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 CGS’I’ & SGST Act,” the authority said.

It was therefore, held that the applicant is eligible to take credit of the CGST & SGST charged by M/s. Catalyst Consulting Chennai in the Tax invoice No. C-OO7 lI7-I8 dated 20.I2.2O17 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.