INPUT TAX CREDIT

[Asked by Guest]

DEAR SIR

I WANT TO KNOW THAT I AM RUNNING PETROL PUMP AND I AM SELLING 2 NON GST ITEMS (PETROL AND DIESEL)AND ONE GST ITEM (LUBRICANTS). SO MY QUERY IS THAT CAN I AVAILED ITC ON OTHER EXP. BILL LIKE TELEPHONE EXP. , REPAIR AND MAINT. ETC. AND UTILZIED IN OUTPUT TAX ON LUBRICANTS SALE.

[KASTURI SETHI]

Your main supply is petrol (Non-GST) and other two non-GST items. . Are you in a position to segregate the expenses (telephone, repair and maintenance etc.) incurred towards taxable and non-taxable supply ? ITC is not beneficial for you, it being costly in the event of non-maintenance of separate record for taxable and non-taxable supply.

[CSSANJAY MALHOTRA]

ITC can be availed proportionately to the turnover of taxable supplies in GST on common services. Apply formulae ITC on common services /total turnover x taxable turnover

[CASusheel Gupta]

Dear Mr. Sohan Lal

For claiming ITC the first expenses needs to be classified at invoice level, i. e. identify the expenses incurred for taxable supplies and exempt supplies. Thereafter for common expenses, proportionate credit can be taken. The formula is as suggested by CS Sanjay Malhotra

CA Susheel Gupta

8510081001, 9811004443

[KASTURI SETHI]

Dear Querist,

I support the views of both experts.

[Ganeshan Kalyani]

Input tax credit can be availed on proportionate basis i.e. input attributable to taxable product. common inputs are availed based on turnover ratio. I agree with the views of experts collegue .

[subramanian vijayakumar]

I agree with the experts views

AI Summary

Input tax credit limited to proportionate taxable turnover; common expenses require segregation and recordkeeping to claim.
ITC on common expenses may be claimed only after classifying expenses at invoice level for taxable versus non-taxable supplies; where segregation is not possible, apply a proportionate apportionment using the ratio of taxable turnover to total turnover to determine eligible ITC. Absence of separate records makes full ITC claim impractical and risky.