How to claim GST input for a property buyer who has no GST

If a property buyer who is not registered for GST (a non-taxable person) purchases a property from a GST-registered seller, the buyer may be eligible to claim Input Tax Credit (ITC) on GST paid by the seller. However, since the buyer is not registered for GST, the process for claiming ITC is slightly different. To claim ITC, the non-taxable buyer should:

1. Obtain a valid GST invoice from the seller, showing the GST charged on the property and the GSTIN of the seller.

2. File a GST TRAN-1 form with the tax authorities, along with the GST invoice. GST TRAN-1 is a form used to claim transitional credit of GST paid on inputs and input services held in the beginning of GST.

3. The input tax credit claimed through TRAN-1 will be credited to the electronic credit ledger of the buyer.

4. Once the GST officer has processed the TRAN-1 form, the input tax credit will be available in the electronic credit ledger of the buyer, which can be used to set off GST liability of the buyer for future tax periods.

It is important to note that the non-taxable buyer can claim ITC only if the property is intended to be used for business or profession and also the buyer should have possession of the property before claiming the ITC.