Reference of Input Services missing in Rule 7(1)(d)
Clause d of Rule 7(1) of draft GST ITC Rules provides that the amount of input tax, out of ‘T’, in respect of inputs on which credit is not available under sub-section (5) of Section 17, be denoted as ‘T3’.
Issue
Rule 7(1)(d) provides for exclusion of blocked credit under Section 17(5), however here the word Input services are not included. Although the credit is denied itself in Section 17(5), still this should effectively be there under rule 7(1)(d) to avoid any possible conflict of taking credit of services specified in Section 17(5).
Suggestion
It is suggested that rule 7(1)(d) be redrafted as follows:
The amount of input tax, out of ‘T’, in respect of inputs and input services on which credit is not available under sub-section (5) of Section 17, be denoted as ‘T3’
Source ICAI Suggestions on GST Rules Submitted to Govt of India