No ITC on Inputs used for mutual fund Transactions : Gujarat AAR

 

The Gujarat Authority for Advance Ruling (AAR) considered a query from Zydus Lifesciences concerning the eligibility for Input Tax Credit (ITC) on common inputs and input services utilized for subscribing to and redeeming mutual fund units.

Zydus Lifesciences, a pharmaceutical company, contended that mutual fund redemptions shouldn’t be considered as exempt supplies under GST. The company argued that since securities are excluded from the definition of goods and services under GST, the transaction involving the redemption of mutual fund units should not fall under the category of exempt supplies.

Ruling

The applicant is not eligible to avail ITC of tax paid on inputs & input services used in relation to the subscription and redemption of mutual funds and also required to reverse the ITC on common inputs and input services used in relation to the subscription and redemption of mutual funds.

The copy of the order is as under:

ZYDUS LIFESCIENCE (1)