ITC Reversal as per Rule 42
Query (Issue) Started By: – LAKSHMINARAYANAN TR Dated:- 1-3-2018 Last Reply Date:- 3-3-2018 Goods and Services Tax – GST
Got 3 Replies
GST
If more than one business vertical are under same GSTIN itself, while applying Rule 42 for ITC Reversal- Total Turnover of entire GSTIN to be taken or same can be split into segment wise also ?
For ex:- Say, under one GSTIN there exists three Business Vertical – Hotel, Courier & Plastic. Hotel vertical has taxable and exempt supplies to calculate ITC Reversal for common input credit can we use the following
Common ITC (of Hotel Vertical) * Exempted Supply in Hotel Vertical
–
Total Supply of Hotel Vertical
Or We have to consider the Total supply of all vertica
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on ₹ 10000/- which formula is correct ?
10000 * 3L/10L = ₹ 3000/- + 500 (5% of 10000) OR
10000*13L/30L = ₹ 4333/- + 500
Experts advice please.
Reply By Ganeshan Kalyani:
The Reply:
turnover of plastic, hotel and courier division put together is ₹ 30 lacs.
total common input tax credit is ₹ 10 thoudand.
formula
10,000 x 10 lacs ÷ 30 lacs = ₹ 3,333/- ( it means out of common credit of ₹ 10 thousand , ₹ 3,333/- is attributable to each division say, plastic, hotel and courier
₹ 3,333/- of plastic division is ineligible credit.
₹ 3,333/- of courier division is fully creditable .
₹ 3,333/- of hotel division need further birfucate into tax attributable to taxabl
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