📅 Published on: April 1, 2025
📰 Publication: Dainik Vishwamitra (Page 8)
✍️ Author: CA Ishan Tulsian
We’re Proud to Announce
We are pleased to share that our latest article on a critical GST topic – “Cross-Utilisation of Input Tax Credit Across Business Verticals Under the Same GST Registration” – has been published in Dainik Vishwamitra, one of West Bengal’s most respected regional newspapers, in its April 1, 2025 edition.
This publication marks a significant step in promoting awareness and clarity on a subject that has triggered both interpretational confusion and compliance hurdles for businesses operating under multiple verticals with a single GSTIN.
🧾 What the Article Covers
The article offers a comprehensive analysis of:
- 🔹 Section 16(1), CGST Act, 2017
➤ Permits Input Tax Credit (ITC) on goods/services used in the course or furtherance of business, with no restriction on inter-vertical use unless separately registered. - 🔹 Sections 49(2) and 49(4)
➤ Once availed, ITC merges into the Electronic Credit Ledger (ECL) and can be used freely for any outward supply under the same registration. - 🔹 Rule 86, CGST Rules, 2017
➤ Governs the control and utilisation of ITC, clarifying that business verticals under one registration can access a common ITC pool. - 🔹 Key Judicial Precedents and Advance Rulings:
🏛️ Essar Steel Ltd. v. State of Gujarat (2022)
🏛️ Cenvat Credit Rules – Shyamal & Sons (2015)
🏛️ Coca Cola India Pvt. Ltd. (2009)
🏛️ Vineet Enterprises Ltd. (2016)
➤ These decisions reaffirm that cross-utilisation is valid unless separate GST registrations are obtained for each vertical.
💡 Why This Matters
Businesses often function across diverse verticals – e.g., trading, manufacturing, consulting – but under the same GSTIN. In such cases, the article explains that:
✅ Separate tracking of ITC per vertical is not mandatory
✅ Cross-utilisation across business lines is legally permissible
✅ Advance Rulings have upheld a flexible and practical interpretation
✅ Input-output nexus is not a condition for cross-application of ITC within a unified registration
🧭 Key Takeaway
“Once availed, Input Tax Credit merges into a common pool in the Electronic Credit Ledger and can be utilized for any outward supply, enabling cross-utilization across business verticals under the same GST registration, regardless of input-output nexus.” – CA Ishan Tulsian
📌 Recommended Action for Taxpayers
🔍 Review your ITC accounting practices
📄 Check compliance with Section 16 and Rule 86
⚖️ Seek advance rulings in case of ambiguity
🛡️ Ensure proper documentation of internal allocation, especially during audits
📞 Need Further Clarification?
If you have any queries or would like to understand the applicability of this principle to your business model, feel free to get in touch with our GST experts at R. Tulsian & Co. LLP. We will be happy to assist with compliance, advisory, and representation services.