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CA Intermediate · Taxation · Input Tax Credit

Sundaram Traders, a registered dealer in Coimbatore, purchased office furniture for Rs 2,00,000 plus GST of Rs 36,000 and uses it exclusively for making taxable supplies. It also bought a laptop for personal use of the proprietor with GST of Rs 9,000. Assuming all other conditions are met, what ITC can Sundaram Traders claim on these two purchases?

Sundaram Traders can claim Rs 36,000. The GST on furniture used for taxable business supplies is eligible credit, while GST on the laptop meant for the proprietor's personal use is blocked credit under section 17(5) because it is not used in the course or furtherance of business.

  1. ARs 45,000
  2. BRs 36,000Correct
  3. CRs 9,000
  4. DNil

Explanation

ITC is available on goods used in the course or furtherance of business, so the Rs 36,000 on furniture is eligible. Goods used for personal consumption are blocked under section 17(5), so the Rs 9,000 on the laptop is not allowed. Claiming Rs 45,000 wrongly includes the personal-use item.

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