TaxTMI 
TaxTMI 
Whether Interest income and schedule III supply will be considered as exempt supply for the purpose of reversal of common input credit under Rule 42 and Rule 43.
Thanks and Regards,
Sanjay Jain
Rule 42 and 43 Input credit reversal
02 Apr 2019 
17 Replies 
37560 Views Asked by
Exempt supply exclusion: no supply transactions in Schedule are not treated as exempt supplies for ITC reversal purposes.
Items in Schedule III are characterized as no supply transactions and, being outside the concept of "supply", should not be treated as exempt supply for purposes of input tax credit reversal under the Rules. Interest income is excluded from exempt supply for reversal except where it is generated as a routine part of taxable business. Recent statutory insertions clarify exclusion of Schedule III transactions (other than specific paragraph exceptions) from the value considered for exempt supply when computing ITC reversal. (AI Summary)
Items in Schedule III are characterized as no supply transactions and, being outside the concept of "supply", should not be treated as exempt supply for purposes of input tax credit reversal under the Rules. Interest income is excluded from exempt supply for reversal except where it is generated as a routine part of taxable business. Recent statutory insertions clarify exclusion of Schedule III transactions (other than specific paragraph exceptions) from the value considered for exempt supply when computing ITC reversal. (AI Summary)