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

Supplier Queries ITC Claim on RCM for GTA Services; Section 17(2) Limits ITC to Taxable Supplies Only. A supplier dealing in both taxable and exempt products inquired about claiming Input Tax Credit (ITC) on Reverse Charge Mechanism (RCM) paid for Goods Transport Agency (GTA) services used for both supply types. Responses advised that ITC is eligible only for taxable supplies, not exempt ones. It was recommended to identify bills separately for taxable and exempt goods. If separation is not possible, ITC can be claimed proportionally based on the turnover ratio. The guidance referenced Section 17(2) of the Central Goods and Services Tax Act.