Dear Experts,
We are purchasing Trucks and using the same for providing taxable supply, ie. for mining operation. Accordingly, we take full ITC of the GST paid.
Later, we are also using the same vehicle for exempt service, ie. GTA.
Wherether, there is any requirement to reverse the ITC availed on capital goods, which were originally used for providing taxable service, but later on used for providing exempt service.
Kindly opine citing the statutory provisions.
Thank You.
Wiyh due regards,
Shyam
Reversal of ITC required for trucks shifting from taxable mining to exempt GTA services under Rule 43 and Section 17(3). A query was raised regarding the reversal of Input Tax Credit (ITC) on trucks initially used for taxable mining operations but later used for exempt services, specifically Goods Transport Agency (GTA) services. Responses indicated that GTA services are not exempt if GST is paid at 12% with ITC. However, if opting for a 5% GST rate under reverse charge mechanism (RCM), it may be considered exempt, necessitating ITC reversal under Rule 43 and Section 17(3) of the CGST Act, 2017. Opinions varied, with some agreeing on the need for ITC reversal under specific conditions. (AI Summary)
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