ITC OF RCM PAID ON GTA SERVICES AVILED ON NON TAXABLE SUPPLY

[DHARMENDRA SONI]

Dear Sir ,

We are supplier of Taxable & Exempt Product . We are paying RCM on GTA services availed for inputs of both type of supplies. Kindly suggest us can we take ITC of RCM paid for both types of supplies.

[KASTURI SETHI]

Under RCM, first you will pay in cash. Proportionate ITC is eligible.

[PAWAN KUMAR]

rightly explained by kasturi sir. refer section 17 (2) cgst act. itc avalable for taxable supplies only not exempted.

[Mahadev R]

To the extent possible identify the bills separately for taxable and exempted goods. Full ITC is eligible for taxable clearances. Full credit ineligible for exempted clearances. Wherever not identifiable or common, ITC can be claimed based on turnover ratio.

AI Summary

Input tax credit eligibility: ITC of RCM on GTA services allowed only for taxable supplies, apportioned where common.
ITC of tax paid under the Reverse Charge Mechanism on GTA services is available only for supplies that are taxable, not for exempt supplies; RCM tax must be paid in cash first. Identify invoices for taxable and exempt use so full credit can be claimed for taxable clearances; where inputs are common and not separately identifiable, claim ITC proportionately using an apportionment method such as the turnover ratio.