Hi
May I see expert opinion on availing ITC on pre-operative expenses when the outward supply includes both exempt and taxable. If the Input or Input services relate to exempt or taxable supply specifically, its apparent not to avail or avail ITC appropriately. But challenge comes when common input/input services and capital goods consumed well before commencement of commercial activity of the business, how to apply rule 42 or 43?
Request expert opinion please
best regards
Durai
Seeking Guidance on Claiming ITC for Pre-Operative Expenses in Mixed Supply Scenario Under GST Rules 42 & 43 A participant in a discussion forum seeks expert opinions on availing Input Tax Credit (ITC) for pre-operative expenses under GST when the outward supply includes both exempt and taxable supplies. The issue arises with common inputs and capital goods used before business operations commence. Respondents highlight that GST rules do not differentiate between pre- and post-operative supplies, and ITC can be claimed if expenses are intended for business furtherance. However, ITC is not allowed if no supply is made, such as during trial runs. The participant clarifies their scenario involves a public sector undertaking developing industrial plots and infrastructure, seeking guidance on applying rules 42 and 43 for common credits. (AI Summary)
TaxTMI 
TaxTMI 
