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    Question

    A company pays goods transporters ₹2,00,000 but no GST

    invoice received so cannot claim input tax credit. The accounting effect on GST payable and expenses:
    A GST input claimed immediately Correct Answer Incorrect Answer
    B Expense debited ₹2,00,000; GST input not claimed until invoice available Correct Answer Incorrect Answer
    C Recognise capital asset Correct Answer Incorrect Answer
    D Defer expense indefinitely Correct Answer Incorrect Answer
    E Treat as contingent liability Correct Answer Incorrect Answer

    Solution

    ITC can be claimed only upon valid tax invoice; otherwise expense recognised.

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