Common ITC reversal under GST

[Muthukumar Muthunarasimhan]

Dear Experts,

As per ITC reversal of common input and input services and capital goods used for manufacturing taxable and exempted supplies by the manufacturer in one GSTIN. Apart from manufacturing turnover there is some traded value of the same taxable products.

My query pertains, as per formula of common ITC reversal , total turnover means inclusive of traded turnover should be included or excluded. Kindly clarify.

[Amit Agrawal]

Under formula prescribed in Rule 42 & 43, ‘F’ is the total turnover in the State of the registered person during the tax period.

Neither Section 17 (1) & (2) nor above rules talks about separate calculations between manufacturing & non-manufacturing supplies OR business-segment wise calculations.

So, total turnover - in the fact of your case - will include value of supplies from trading as well as manufacturing activities.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[Ganeshan Kalyani]

Trading turnover also to be considered for the purpose of common credit calculation.

AI Summary

Experts Clarify ITC Reversal: Include Both Trading and Manufacturing Turnover in Total Calculation Under GST Rules 42 & 43. A discussion on a forum addresses a query about the reversal of Input Tax Credit (ITC) under the Goods and Services Tax (GST) for a manufacturer dealing with both taxable and exempt supplies. The question focuses on whether traded turnover should be included in the total turnover calculation for ITC reversal. Two experts respond, clarifying that according to the rules, the total turnover should include both trading and manufacturing activities. This interpretation is based on the formula prescribed in Rule 42 and 43, which does not differentiate between manufacturing and non-manufacturing supplies.