📚 Part of: Badminton And Indian Sports Mcqs: Gst, Geography, History Quiz

Your corporate is headquartered in Gurgaon. It is also registered in Chennai, Bangalore, Hyderabad and Kochi. All required details are shared by the admin to you. An employee is travelling officially to Pondicherry. Can they claim the input credit for this booking?

Category: Miscellaneous Indian Gk

Correct Answer: D) No.

Exam Relevance: CA Final, CS Executive, CS Professional, CMA Foundation

Difficulty: Moderate

Concept notes:

Under the Goods and Services Tax (GST) regime in India, input credit can be claimed for business expenses incurred for official purposes. However, the eligibility for input credit is subject to the place of supply and the registered location of the company. If the place of supply does not match the registered location, input credit cannot be claimed.

Common Mistakes:
  • Assuming that any registered location of the company can be used for claiming input credit.
  • Confusing the place of supply with the location of the employee.
  • Believing that the headquarters location is sufficient for claiming input credit.
Explanation:

Under the Goods and Services Tax (GST) regime in India, input credit is a crucial aspect of tax management for businesses. Input credit allows companies to claim a refund on the GST paid on business expenses, provided these expenses are incurred for official purposes and the place of supply aligns with the registered location of the company.

In this scenario, the company is registered in Chennai, Bangalore, Hyderabad, and Kochi, but not in Gurgaon, despite Gurgaon being the headquarters. The employee is traveling officially to Pondicherry. For the company to claim input credit on this travel booking, the place of supply (Pondicherry) must match one of the registered locations of the company.

The key concept here is the alignment of the place of supply with the registered location. The place of supply is determined by the location where the service is provided. In this case, the service (travel) is provided in Pondicherry. However, Pondicherry is not one of the registered locations of the company. Therefore, the company cannot claim input credit for this booking.

Option A suggests using the Chennai details for both the employee and the company. This is incorrect because the place of supply (Pondicherry) does not match the registered location (Chennai).

Option B suggests using the Gurgaon details for both the employee and the company. This is incorrect because Gurgaon is not a registered location for the company, and thus, it cannot be used for claiming input credit.

Option C suggests using the Chennai details for the employee and the Gurgaon address for the company. This is incorrect because Gurgaon is not a registered location, and the place of supply does not match the registered location in Chennai.

Option D correctly states that input credit cannot be claimed for the travel booking to Pondicherry. This is correct because the place of supply (Pondicherry) does not match any of the registered locations of the company (Chennai, Bangalore, Hyderabad, Kochi), and the headquarters location (Gurgaon) is not registered for GST.

In summary, for a company to claim input credit, the place of supply must align with one of the registered locations of the company. Since Pondicherry does not match any of the registered locations, input credit cannot be claimed for this booking.

Option Analysis:
  • Option A: Incorrect. The option suggests using the Chennai details for both the employee and the company. However, the place of supply for the travel booking to Pondicherry does not align with the registered location in Chennai, making it ineligible for input credit.
  • Option B: Incorrect. The option suggests using the Gurgaon details for both the employee and the company. However, Gurgaon is not a registered location for the company, and thus, it cannot be used for claiming input credit.
  • Option C: Incorrect. The option suggests using the Chennai details for the employee and the Gurgaon address for the company. Since Gurgaon is not a registered location, and the place of supply does not match the registered location in Chennai, input credit cannot be claimed.
  • Option D: Correct. The option states that input credit cannot be claimed for the travel booking to Pondicherry. This is correct because the place of supply (Pondicherry) does not match any of the registered locations of the company (Chennai, Bangalore, Hyderabad, Kochi), and the headquarters location (Gurgaon) is not registered for GST.
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