KMP Company Ltd., a registered supplier of Bengaluru (Karnataka), is a manufacturer of goods. The company provides the following information…

3. (a) Computation of ITC available with KMP Company Ltd. for the month of April Particulars ITC (₹) Life Insurance premium paid by the company on the life of factory employees [Note 1] Nil Raw materials purchased [Note 2] Nil Raw materials used for zero rated supply [Note 3] 50,000 Work contractor's service [Note 4] 30,000 Capital goods purchased in respect of which depreciation is claimed on the tax component [Note 5] Nil Goods sent to job worker's premises [Note 6] --- Total ITC available 80,000 Notes: (1) ITC on life insurance service is available only when it is obligatory for an employer to provide said services to its employees under any law for the time being in force. Since it is not obligatory for the employer in the instant case and thus, the ITC thereon is blocked [section 17(5) (b) of the CGST Act, 2017]. (2) ITC cannot be taken since invoice is missing and delivery challan is not a valid document to avail ITC [Section 16(2)(a) of the CGST Act, 2017]. (3) ITC can be availed for making zero-rated supplies, notwithstanding that such supply may be an exempt supply [Section 16(2) of the IGST Act]. (4) ITC is blocked on works contract services when supplied for construction of an immovable property. However, “construction” includes only that repairs which are capitalized along with the said immovable property. In this case, since repairs of building is debited to P & L Account, the same does not amount to 'construction' and hence ITC thereon is available [Section 17(5) (c) of the CGST Act, 2017]. (5) ITC is not available when depreciation has been claimed on the tax component of the cost of capital goods under the Income-tax Act [Section 16(3) of the CGST Act, 2017]. (6) The principal is entitled to take ITC of inputs sent for job work even if the said inputs are directly sent to job worker. However, where said inputs are not received back by the principal within a period of 1 year of the date of receipt of inputs by the job worker, it shall be deemed that such inputs had been supplied by the principal to the job worker on the day when the said inputs were received by the job worker [Sub-sections (2) and (3) of section 19 of the CGST Act, 2017]. Hence, the ITC taken by KMP Company Ltd. in the month of September last year is valid and since one year period has yet not lapsed in April, there will be no tax liability on such inputs.