ITC on Exempted item

[Subhas Prasad]

Dear Sir

Good Evening

I want to know that if any one dealing with Exempted item means the final product is exempted in GST but the some of consumable item are taxable then he should claim her ITC or not

AI Summary

Eligibility to Claim ITC Denied for Taxable Consumables Used in GST-Exempt Final Product Production A query was raised regarding the eligibility to claim Input Tax Credit (ITC) on taxable consumables used in the production of a GST-exempt final product. Four responses clarified that ITC cannot be claimed in such cases. The reasoning provided was that since the final product is exempt from GST, claiming ITC would result in a revenue loss for the government. The chain of input tax credit is broken when the final product is exempt, which means ITC on consumables cannot be availed, resulting in a tax burden.