TaxTMI 
TaxTMI 
Is credit available on freight paid on Reverse Charge basis on transportation of petroleum product?
ITC ON TAX PAID THROUGH RCM ON NON GST GOODS
20 Nov 2020 
10 Replies 
5570 Views Asked by
Input Tax Credit on reverse charge: ITC allowed only if underlying supply is taxable or used in taxable output.
Availability of Input Tax Credit on GST paid under reverse charge for freight on petroleum products turns on whether the underlying goods are taxable: no ITC where the goods are non GST; ITC permitted where the recipient uses the goods in making taxable supplies; duties other than GST are not creditable; where RCM covers both taxable and exempt goods and cannot be segregated, ITC must be apportioned to taxable turnover under the statutory apportionment mechanism; recipients must otherwise satisfy ITC eligibility and registered business requirements, while businesses solely trading in non GST goods cannot claim such ITC and may seek refunds. (AI Summary)
Availability of Input Tax Credit on GST paid under reverse charge for freight on petroleum products turns on whether the underlying goods are taxable: no ITC where the goods are non GST; ITC permitted where the recipient uses the goods in making taxable supplies; duties other than GST are not creditable; where RCM covers both taxable and exempt goods and cannot be segregated, ITC must be apportioned to taxable turnover under the statutory apportionment mechanism; recipients must otherwise satisfy ITC eligibility and registered business requirements, while businesses solely trading in non GST goods cannot claim such ITC and may seek refunds. (AI Summary)