ITC claim on preservative used in taxable and exempted goods

[S.C. WADHWA]

Dear Expert,

We are using preservatives for manufacturing food items in taxable as well as exempted goods. Please suggest formula to claim ITC on purchase/consumption of preservative.

REGARDS,

WADHWA

AI Summary

Experts Discuss ITC Claims for Preservatives in Mixed Supply Manufacturing Under GST; Refer to CGST Act and Rules. A user inquired about claiming Input Tax Credit (ITC) for preservatives used in manufacturing both taxable and exempted goods under the Goods and Services Tax (GST). Experts advised referring to specific sections and rules of the CGST Act and Rules. One expert suggested calculating eligible ITC based on the ratio of taxable supply turnover to the total turnover of taxable and exempt supplies. Another expert recommended identifying the preservative usage at the invoice level to determine the credit reversal for exempt supplies. It was noted that not all expenses need to be treated as common ITC, and specific circumstances should guide the approach.