May 2025

ITC Adjustment
Sheet
Paper 5: IDT - GST & Customs

Prepared by:
CA Vikalp Gupta

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Sr
Outward Supplies & Some Other Adjustments
No.
Supply of goods on which condition of
contract include inspection. Cost of
1 It include in the value of taxable supplies.
inspection directly paid by recipient to testing
agency
Registered person (Mumbai) provide stock
counting service to registered person in
It is Intra-state supply as the POS is location of
2 Gujarat, whereas the place where stock
recipient (Mumbai) being fixed establishment
counting was carried out was at godown
location in Mumbai
Provide renting service of his apartment at Taxable since supply of accommodation unit
3
daily rent of ₹1500 for residential purpose exceed ₹1000 per day
Mumbai stores transfer to another store
located in Goa certain taxable items for As per rule 28, Value of such goods consider as
purpose of distributing same as free sample. ₹8Lakh. The value declared in invoice is not
4
The value declared in the invoice for such taken as, Goa store is not entitled for full credit
items is ₹5L, such item are sold in Mumbai because goods distributed at free sample.
are ₹8 L.
Supply contract is on FOR basis, payment of
Supply goods on FOR basis and Lorry freight
5 freight is liability of supplier but paid by recipient.
has been paid by recipient to the lorry driver
Thus, include in value of Supply
During the month, company offered a
discount 25% of the product, the sale which is
intended to discontinue from next month and
Discount given after effecting of supply is not in
issued credit note to the dealers. The product
term of agreement that existed at the time of
6 was lying in stock with the dealer and the
supply. Therefore, discount is not allowed as
discount offered to customer was borne by the
deduction from value of supply
company. The amount reimburses to the
dealer for the discount given to customer
during the month
Supply (Kerala) of consignment in a
territorial water. The territorial water is
7 located at distance of 12 nautical miles from POS is Tamil Nadu
baselines of state of Kerala and 11 nautical
miles from baseline of state of Tamil Nadu
Received an advance for future supply of Tax will be payable only on advance for service.
8 goods and service from customer (70% is In case of goods, tax is payable at the time of
related to future supply of service) issuance of invoice
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Export of taxable product with payment of Consider as outward supply and ITC can also
9
IGST availed
A Zero-rated supply can be supplied without
Export of taxable product under LUT/ goods payment of tax under LUT. Therefore, No
10
supplied to SEZ outward tax liability. {Export/ Zero rated supply
not consider as Exempt supplies}
Consultancy service provided to unrelated
It fulfilled the condition of export of service.
clients located in foreign countries. All
11 Export of service is zero rated supply. Therefore,
consideration has been received in foreign
No outward tax liability
exchange
Sale of building is neither a supply of goods nor
service. Therefore, No outward tax liability.
Sale of Building (excluding stamp duty value
12 But for calculation of common credit, it include
of ₹2.5L, being 2% of value)
in exempt supplies: SDV value include in the
value of exempt supplies (2.5L/2%=1,25,00,000)
Consider as exempt supply. Therefore, No
Interest received on investment in fixed outward tax liability.
13
deposit with a bank/ Sale of Duty Scrips But in calculation of Common credit: It include
only in Total turnover (not in exempt turnover)
Sale of shares is neither a supply of goods nor
service. Therefore, No outward tax liability.
14 Sale of Shares
But for calculation of common credit, it include
in exempt supplies: 1% of sale Consideration
Sale of those goods is neither a supply of goods
Supply of warehouse goods before clearance nor service. Therefore, No outward tax liability.
15
of home consumption But for calculation of common credit, it include
in exempt supplies
It is not liable for GST. But for calculation of
Supply of petrol and diesel (including VAT
16 common credit, it includes in exempt supplies:
and excise duty)
Value less (VAT & excise duty)
Tax is payable by body corporate under reverse
charge. Therefore, No outward tax liability.
Recovery agent service provided to a body
17 In case of outward supply and tax is payable
corporate (NBFC)
under RCM by recipient then it include in exempt
supply while calculation of common credit
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It is chargeable under reverse charge. In case of

Amount received from a company for
outward supply and tax is payable under RCM by
18 sponsored the exhibition organized by us
recipient then it includes in exempt supply while
(body corporate)
calculation of common credit
DSA provided by individual to bank, tax is
Direct Selling Agent service provided to
payable by bank under RCM. In case of outward
bank(registered) by an individual, for
19 supply and tax is payable under RCM by recipient
providing service related to opening of bank
then it include in exempt supply while calculation
account/loan product
of common credit
Excise duty include in the value of supplies while
20 Supply of Cigarettes (including excise duty)
calculating tax. No other adjustment
Provide pure labor service of construction of
21 single commercial unit not forming part of -
any complex to customer
The Company sold Van used for personal
22 transport by auction. No GST credit was taken -
at the time of purchase.
The company has a policy of raising an
invoice separately toward transportation cost
Supply of goods and transport service are
of their product on their dealer at the time of
composite supply as the transportation is charged
invoicing for the product sold to them. The
23 flat rate to all customer irrespective of distance.
company is collecting a GST at 5% on all
Therefore, GST rate on transportation service is
transaction and the amount is collected as %
same as supply of goods.
of the value of goods supplied irrespective of
distance involved
Vasudev is an Operating member in mining
and exploration service. He provided certain
service to JV at same site in which he is also
24 It is not a cost petroleum and liable to tax
a member. He believes the consideration
received from the JV is cost petroleum and
not taxable
He sells petroleum silt (not taxable under
Cost petroleum is not a consideration of service,
25 GST) as part of compensation while exploring
hence not taxable
petroleum reserve
Sold future derivative contract at NSE which Futures derivative contracts with no delivery
26 was due in the month. Said contract has no option qualify as securities. They are neither
delivery option goods nor services.
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Passenger transportation service provided to

Passenger transportation service provided by
general public by company owned ferries
27 public transport in a vessel between places is
between two island. Purpose was facilitating
exempt
daily commutation of local people
Hired out excavators and dumpers along with
It is composite supply and rate of principle will
28
operators apply.
Value is higher of 1% of the amount of such
Corporate guarantee provided to related
29 guarantee offered per annum or actual
person
consideration.
Transfer of tenancy right against consideration in
Transfer of tenancy rights against
30 the form of tenancy premium is taxable even
consideration
though stamp duty has been paid on the same.
Not a supply since bond amount recovered is not
Bond amount recovered from employee
31 a consideration for tolerating the act of premature
leaving employment before stipulated period
quitting of employment
Place of Supply in case of Intermediary
32 Location of Supplier- Sec 13(8)
Services
Services provided to Gujarat government Taxable- Services provided by CG, SG, UT
administration are under the health training administration under any training programme for
33
programme. 51% of total expenditure of said which 75% or more expenditure borne by CG, SG
govt is borne by Gujarat government. or UT administration are exempt from GST.
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Sr
No.
Inward supplies on which ITC is available
Purchase of manufacturing machine sent
ITC on capital goods sent directly to job worker
1 directly to job worker’s premises under
premise under challan is allowed
delivery challan
Imported computer accessories from Korea
and the goods landed in Mumbai Port. The
ITC include IGST charged on import of goods &
2 goods reached at his registered premises on
available in the month of January
3rd January. IGST has been paid on imported
goods on 28th December of preceding year.
Apart from the above, received 15 invoices
involving IGST of 1,00,000, during the
current month
Out of the 15 invoices as per above, 12 ITC can be claimed only on the invoices uploaded
3
invoices involving IGST of ` 95,000 were by supplier in form GSTR-1
uploaded by the suppliers in their GSTR-1
return and got reflected in GSTR-2B of Mr.
Rishi.
Jumbo Sales Pvt Ltd, a supplier of readymade It is not the case of individual supplies of free
garments, announced 'Buy One get Two free' goods but a case of three individual where single
offer on Men's T-shirts on Diwali to boost its price is charged for entire supply. Thus it is
4
sales. You are required to advice the company allowed to avail ITC on inputs, input service and
on the availability of ITC in respect of Inward capital goods used in relation to supply of T-
Supplies used in relation to such supply shirts.
P&M includes such foundation and support, thus
Company has availed works contract service ITC is allowed in respect of works contract service
5 for construction of foundation on which a availed.
machinery is to be mounted permanently ITC is blocked on work contract service for
construction of immovable service for own use
ITC on work contract service for P&M fixed to
Work contract service availed for erection and earth is allowed and it is assumed that RO
6
installation of RO treatments plant in factory treatment plant installed in factory is used for
making further supply
Work contract service used in repair of factory
7 -
building which is debited in P&L account
Procured Cements, paints and service of
architect and interior designers for
8 -
construction of commercial complex for one
of its clients
Avail maintenance & repair service from
ITC is allowed for finished goods which are
9 "motors" for trucks used in transportation of
eligible for ITC.
goods
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Telephone expense paid toward mobile phone

10 -
bill of employees- use for official purpose
Life Insurance policy for specified employees
have been taken by the company to fulfill a
11 statutory obligation in this regard. -
Health insurance of factory employees as
required by the Factories Act, 1948
Consumables purchased from registered
suppliers including high speed diesel (Excise ITC is available in respect of consumable only.
12
and VAT paid) valuing ` 31,250 for running No GST being levy on diesel.
the machinery in the factory
Raw Material imported from china. Basic
custom duty: ₹0.15L, Social welfare Credit of IGST paid on import of goods can be
13
Surcharge: ₹0.015L and integrated tax of availed (₹0.2997L)
₹0.2997L are paid on material
Raw material imported from china. Supplier GST paid under reverse charge. ITC is allowed
14
has not uploaded GSTR-1 whether supplier has uploaded or not GSTR-1
Freight Paid to GTA for inward transportation GST paid under reverse charge on freight paid to
15
of taxable items GTA for taxable items
Availed service of arbitral tribunal to settle a Tax on service provided by AT is payable under
16
case reverse charge
Paid remuneration to independent director or Tax on remuneration paid to director payable
17
sitting fee to any director under reverse charge
Person has been assigned the mining right
18 from govt, and the amount of IGST involved It is chargeable under reverse charge
against royalty payment is ₹3L
Person was allotted an office on rent by state
19 It is chargeable under reverse charge
govt close to the sea shore
Received a debit note in this month respect of
Time limit u/s 16(4) is calculated from the date of
20 inward supplies made in FY 20-21. Material
issue of debit card.
used for manufacturing of goods.
Purchase silk yarn from a person who
21 It is chargeable under reverse charge
manufacture silk yarn from silk milk
Legal service received from advocate for Tax on legal service provided by advocate to
22
taxable goods Business entity payable under reverse charge
Tax on renting of Immovable property by local
23 Rent paid to local municipality authority to registered person is payable under
reverse charge
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Raw Material/ Capital goods used exclusively

24 -
for taxable outward supply
Raw Material/ Capital goods used for both Common Input Tax Credit calculation apply
25
taxable and exempts outward supply (T1,T2….)
Raw material purchased for Zero rated supply
26 -
whether taxable or exempted
ITC is not allowed on pipelines laid outside the
Laid pipelines upto the gate of factory for factory premise and telecommunication tower.
27
purpose of production facility (ITC allowed when pipelines laid inside the
factory)
As a Input Service Distributor (ISD), Total Amount of total value is assumed as inclusive of
28 value of credit note received, during month, GST {e.g. Total value:118 and rate 18%, so GST
applicable exclusively to particular unit amount (ITC): (118/18%)*18%=18}
As a Input Service Distributor (ISD), Input
Ineligible ITC will also be distributed among all
29 service used by all units: Ineligible ITC in
units in ratio of turnover
term of section 17(5)
Goods purchased from supplier in January
where full payment of goods has been made to ITC can be claimed provisionally in January
30
supplier but tax has been deposited by supplier since all the condition has been complied
in the month of April
Purchase a Maxi Cab for transport of its Maxi Cab means seating capacity of more than 13
31
employees to and from home to office persons
Company purchase mobile phone of ₹1.2L in
Supply made to related person(employee), open
its name and given to employees to perform
32 market value (OMV) of the same will be consider.
duties. At the end of month, company sold
Also, ITC of these mobiles are allowed at OMV
these mobiles to employee at ₹20,000
Purchase goods from manufacturer as a
Merchant exporter eligible to take ITC of IGST of
33 merchant exporter (payment of 0.1% IGST)
0.1%
and export same under LUT
Company purchase a three-wheeler having
capacity of 2 person (engine capacity 20CC) ITC on three-wheeler with engine capacity of
34
which being used for transportation of staff 20CC is allowed as it is not a motor vehicle
from resident to factory
Purchase of employee uniform which is ITC on uniform necessary to carry out business
necessary for safety of workers. Some uniform activity is available. However, uniform not
35
used by employee outside the factory for provided for safety purpose are being used for
personal purpose personal purpose, ITC not allowed
Monthly Rent for Complex for office/ Amt
36 paid for packing the items and putting label Common Credit calculation apply (T1,T2….)
(both taxable and non taxable)
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No.
Inward supplies on which ITC is NOT available
Raw Material/ Capital goods used exclusively ITC is not allowed. As used exclusively exempt
1
for exempt supply supply
Raw material purchased for which invoice is
2 -
missing but delivery challan is available
Input Tax on catering services procured in
connection with housewarming ceremony or ITC on outdoor catering is blocked if same is not
3
Outdoor catering service availed for business used for making further supply
meetings
Input Tax on Cosmetic and plastic surgery of ITC on cosmetic and plastic surgery is blocked if
4
manager of factory same is not used for making further supply
GST paid on Premium payment on health
insurance/ GST paid on rent a cab service
availed for transportation of employees/ ITC
5 on travel benefit extended to employees/ ITC Blocked credit
on fitness or wellness service for employees/
gifts given to employees, which is not
obligatory under law
Purchase of car used by director exclusively
6 ITC is blocked as seating capacity<=13 persons
for the purpose of business meetings
Car purchased for making further supply of
Though ITC is not blocked on further supply of
7 such car. Such car destroyed in accident while
Cars but ITC on destroyed goods is blocked
used by customer in test drive
Purchase raw material store in factory got
8 spoiled due to rain and become unusable and ITC is blocked under destroyed goods
received insurance amount for the same
Company caught an employee who had stolen
goods during the month. Goods could not be
ITC of stolen goods is blocked. If already ITC
9 recovered but company successfully
taken by company then ITC need to be reversed
recovered the cost from employee. IGST
credit has been taken to company
Solar panel installed in factory for providing ITC is blocked on work contract service for
10
electricity to be used in factory construction of immovable service.
Works contract services available for ITC is not allowed (Car parking shed is not P&M
11
constructing a car parking shed in its premises. and not used for further supply)
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As an Input Service Distributor (ISD), ITC

ITC Available for distribution in the month is to
12 Pertaining to March was Inadvertently not
be distributed in the same month
distributed consider for distribution this year
As an Input Service Distributor (ISD), Inputs ISD mechanism is apply only to input services not
13
used by one unit/center goods
14 Salary Paid to staff No GST payable thereon
Registration certificate of voluntary In case of Voluntary registration,
registration granted on 24th September (Firm ITC can availed on inputs on the day of
not making inter state supplies). proceeding the "effective date of registration" but
15
Value of inputs contained in finished goods such inputs should not be older than 1 year on the
held in stock-₹200000. Such inputs were date of registration.
procured on 19th sept last year. No ITC on inputs tax paid on capital goods
Audit fee paid to chartered accountant. The
firm raises an e-invoice without IRN (Invoice
16 -
Reference Number) for said services whether
invoice is reflecting in GSTR2A or not
Freight Paid to GTA for inward transportation
17 -
of goods not liable for GST or exempt goods
Raw materials for which invoice has been
received and GST has also been paid for full Where goods are received on installment/lots, ITC
18 amount but only 50% of material has been is allowed upon receipt of last installment/lot.
received, remaining 50% will be received in Therefore, ITC will be availed in next month
next month
GST Paid on items given as free sample/
19 Calendar distributed to customer and -
distributors
Capital goods purchased on which
20 depreciation has been taken on full value -
including tax
Goods purchased where invoice sent in the
Since goods has been received in the month of
21 month of January and goods received in the
April, ITC available in the month of April
month of April
One invoice of input service dated 20-01-
ITC cannot be availed after 30th November or
22 XXXX has been received in October, annual
date of filing of annual return W.E. earlier
return for the FY was filed on 15th Sept
Consideration paid for repair of machinery
Location of supplier and place of supply
23 used for taxable goods, machinery was sent to
((13)(3)(a)) is outside India so not liable for GST
USA for carrying out repair work
24 Transportation of goods by horse pulled carts Not liable for GST
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Company (Registered) paid for security Security service provided by body corporate is
25 service to another company (not registered taxable under FCM and supplier is not registered
under GST) under GST, therefore no gst applicable
Import of goods from china under CIF. The
26 goods were sold as high sea sales to Indian -
party.
27 Transfer of goods to branch with a state -
Purchase goods from a party in one country No ITC since tax is not payable on goods and
and sold to a party in another country without service provider (agent) is intermediary in given
28 bringing goods in india. Sales commission transaction, POS is location of supplier, i.e.
paid to their agent connected with this outside India. So, tax is not payable under reverse
transaction. charge.
Service of transportation of goods without issue
Paid inward transportation expense to a tempo
29 of consignment notes is not covered under GTA.
owner who has not issued consignment notes
Hence exempt
TOS of such service is 1st feb (earlier of date of
A Invoice of service related to rental cars of payment or following 60 days since issue of
last year (02-Dec) was omitted to record in invoice). Therefore, ITC cannot avail in current
30
BOA and no payment was made against the month.
same in Jan. Normally RCM can apply according to
conditions.
A company registered under Maharashtra
purchase processing machines from a person POS & LOS : Gujarat, so CGST/ IGST apply but
31 registered under Gujarat. Machine were person is registered in Mumbai so ITC cannot be
brought in " as is where is condition" at availed
Gujarat to produce items
He had availed services which was liable to
tax under reverse charge. Payment for the
same to the supplier was not made till the Tax was already paid to government under
32 current month (overdue for 181 days as at 1st reverse charge. Therefore, no treatment of this
January). However, tax due under the said adjustment
transaction was paid to Government and credit
availed in the month of transaction itself