Input credit in cases where output is Exempt under GST (not zero rated)

[Guest]

I believe that it would be permissible to claim input credit even when the output is zero rated under GST.

However, what is the proposal on input credit when output is exempt from GST, not zero rated? Please advise.

The question is in the context of books, which are exempt from indirect taxes under the present tax regimes, namely Service Tax and VAT. There is no clarity as of now whether books would be exempt or NIL rated in the GST regime.

[DR.MARIAPPAN GOVINDARAJAN]

Whatever it may be, we have to wait till the GST laws come into force.

[YAGAY andSUN]

For the mean while you may also refer FAQs on GST.

[Ganeshan Kalyani]

When final product is exempt then the credit would not be available. But if zero rated sales then credit would be available.

The schedule rate is not known as of now. Therefore will have to wait till such time. But in my view more or less the current tax schedule may be carry forward in GST with some edition deletion.

[Ganeshan Kalyani]

https://www.taxtmi.com/news?id=16643

[Guest]

Thanks so much Ganeshan.

Kind regards,

Ankur

[Ganeshan Kalyani]

Welcome sir.

AI Summary

Uncertainty Over Claiming Input Credit for Exempt Outputs Under GST; Books' Tax Status Raises Questions A discussion on a forum addresses whether input credit can be claimed under GST when the output is exempt but not zero rated. The query highlights the uncertainty surrounding the tax status of books under the upcoming GST regime, as they are currently exempt under existing tax laws. Responses suggest waiting for the GST laws to be finalized, with one participant noting that input credit is unavailable for exempt outputs but available for zero-rated sales. Participants also recommend referring to GST FAQs for interim guidance. The discussion reflects the need for clarity in the upcoming GST framework.