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

[Asked by 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 and SUN]

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

Thanks so much Ganeshan.

Kind regards,

Ankur

[Ganeshan Kalyani]

Welcome sir.

AI Summary

Input tax credit availability hinges on zero-rated versus exempt classification; affect credit entitlement pending GST law and guidance.
Under GST the operative rule stated is that input tax credit is available for zero-rated supplies but not for exempt supplies; applied to books, entitlement is uncertain pending the enacted GST law, official guidance, and the final tax schedule.