TaxTMI 
TaxTMI 
TaxTMI 
A commercial Cooperative Society is paying municipal tax to the corporation, the land of the society being a leased land paying charges to district collector etc. and recovering the same from the members at actuals. This being exempted supply they are not required to pay GST on it. But in that case, are they required to proportionately reverse the ITC which they are claiming?
Proportionate Reversal of ITC
Kaustubh Karandikar
Proportionate reversal of ITC required where exempt recovery of municipal tax leads to exempt supplies, reducing reclaimable input tax. A cooperative society that pays municipal tax and recovers it from members as an exempt supply must proportionately reverse input tax credit, adjusting ITC to exclude the portion attributable to the exempt recovery of municipal tax. (AI Summary)
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