Selling Taxable & Exempted Goods Online: ITC of Swiggy, paytm etc. proportionately disallowed; AAR

The applicant is a Partnership firm registered under the provisions of the Central Goods and Services Tax Act, 2017, and Karnataka Goods and Services Tax Act, 2017 (hereinafter referred to as the CGST Act and KGST / SGST Act respectively). The applicant is engaged in trading in fresh and semi-processed meat products like chicken, mutton, fish, pork, and all type of packed cold cuts spices and masala powder, etc.

The applicant has stated that they are trading in fresh and semi processed meat products like chicken, mutton, fish, pork and all type of packed cold cuts spices and masala powder etc. They are trading in both taxable and exempted goods. The percentage of exempted goods traded is around 90% and the balance 10% traded is taxable goods.

The applicant has sought advance ruling in respect of the following questions:

i. What percentage of GST input tax should be claimed for our nature of business as mentioned above for the following services received from our service providers.

a) GST paid for our shop on commercial rent to landlord.

b) GST paid on commission to Dunzo and Swiggy for ecommerce online service.

c) GST paid on service charges charged by paytm.

d) GST paid on service charges charged by Banks.

ii. What percentage of GST input tax should be claimed for our nature of business as mentioned above for the following other general goods purchased for carrying on our business.

a) Packing material

b) Printed material

c) Capital goods like cutting machine, weighing scale, refrigerators, computers, and hardware and software goods.

Advance Ruling:

It seems that the Applicant wants to know the percentage of input tax credit to be claimed in view of the nature of their business. Since the Applicant is involved in the supply of both taxable and exempted supplies, the Applicant has to avail the input tax credit proportionately in terms of section 16, 17 of CGST Act 2017 read with Rule 4 2 of CGST Rules 2017; wherein the procedure to be followed is clearly mentioned.

Click here to read the Advance Ruling