How to Claim Prepaid expenses ITC under GST

Q:  Insurance premium paid annually Rs 12000. 9 month falls in 2017-18 and 3 month falls in 2018-19. Thus 3 month insurance pre-paid. we have availed full ITC in tax invoice in 2017-18 year.Do we have to reverse ITC for 3 months treating as service not received in that year?

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Answer . You are not required to reverse ITC under GST. Insurance service for whole year is supplied when insurance policy is issued by Insurance Company.

There is no provision for such financial year wise bifurcation for Expenses under GST

Concept of financial year is in income tax  and not in GST .

Relevant Portion of Section 16 of CGST Act 2017 :-

Eligibility and condition for taking input tax credit.

16. (1) Every registered person shall, subject to such conditions and restric- tions as may be prescribed and in the manner specified in section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person.

(2) Notwithstanding anything contained in this section, no registered person shall be entitled to the credit of any input tax in respect of any supply of goods or services or both to him unless,—

(a)		he is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying documents as may be prescribed;
(b)		he has received the goods or services or both.

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GST Input Tax Credit : Free Study Material

Topic Wise Commentary on GST Act of India

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