Sir, assessee is manufacuring aluminium which is taxable under GST and also generate power through power plant. 70 % power generated used in manufacturing of aluminium and 30 % is sold outside to state Govt. Now, electricity is exempt under GST.
GST officer asked to reverse whole ITC in relation to power plant whether capital, input or services. But my contention is we are eligible for proportionate ITC on power plant to the extent of power used in manufacturing of aluminium product.
Whether I m eligible for proportionate ITC on power plant. Kindly provide any judgement copy.
Dispute Over Input Tax Credit Reversal for Power Plant: Proportionate ITC Suggested Under GST Act Section 17(2) An individual inquired about the eligibility for Input Tax Credit (ITC) on a power plant used partially for manufacturing taxable aluminium and partially for selling electricity, which is GST-exempt. A GST officer suggested reversing the entire ITC, but the individual argued for proportionate ITC based on usage. Respondents cited Section 17(2) of the GST Act, supporting proportionate ITC reversal for the exempt portion, referencing rulings from Karnataka and Tamil Nadu. They emphasized reversing ITC based on the turnover proportion of exempt sales, not usage, aligning with prescribed rules. (AI Summary)
TaxTMI 
TaxTMI 
TaxTMI 
