ITC reversal on exempted income in GSTR-9

[Archna Gupta]

Dear Experts

I have reviewed earlier discussions on itc reversal on interest income but still have queries on other incomes which have no connection with my business, then whether we have to show and where we have to show these incomes in GSTR-9.

1. Rental residential income- I know this is exempted but whether itc reversal is required even if no connection with business and whatever itc is claimed is GSTR-3B, nothing is spent in earning rental income.

2. Dividend- Is this actionable claim and will be shown in Non GST supply? Any reversal of ITC required?

3. Pension income from LIC under pension scheme- what type of supply is this? Any effect on ITC?

4. Capital gain from non business assets?

Please reply on the above queries in view of GSTR-9.

Best regards

Archna Gupta

[KASTURI SETHI]

My views:

1. No ITC reversal is required.

2.It is actionable claim. Does not conform to the definition of supply. Will be shown under non-GST supply.

3. Pension is part of salary. May be from LIC. Liable to income tax. Status of salary and pension is same. No impact on ITC.

4. Needs elaboration.

[Archna Gupta]

Thank you Kasturi sir for your prompt reply.

Capital gain from non business assets such as sale of membership of a club.

[KASTURI SETHI]

You have used the word 'sale' . Is it correct ? It is taxable under SAC 999594.

AI Summary

ITC reversal on exempt or non-business income: guidance on when reversal is not required and reporting.
Residential rental income exempt and unconnected with business does not require ITC reversal. Dividend receipts are actionable claims treated as non GST supply and do not require ITC reversal. Pension from an insurance pension scheme is treated as salary/pension and has no impact on ITC. Capital receipts from non business assets need further analysis; sale of a club membership is classified under SAC 999594 and requires separate GST reporting consideration.