TaxTMI 
TaxTMI 
Kindly clarify that the input on plant and machinery purchased for hauling paddy to rice can be utilized for payment of tax received from government department for hauling of paddy or not
INPUT OF PLANT AND MACHINERY
20 May 2023 
7 Replies 
3688 Views Asked by
Input tax credit eligibility depends on use for taxable supplies; mixed use requires proportional reversal under apportionment rules.
ITC on plant and machinery used for hauling paddy is available only to the extent the inputs are used for making taxable supplies. If the asset is exclusively used for taxable services, full ITC is admissible. If it is used for both taxable and exempt activities, ITC must be apportioned and reversed proportionately under the statutory reversal/apportionment rules. Determination of entitlement requires clarity on who claims ITC, the nature of the output supplies, and whether those supplies are taxable or exempt. (AI Summary)
ITC on plant and machinery used for hauling paddy is available only to the extent the inputs are used for making taxable supplies. If the asset is exclusively used for taxable services, full ITC is admissible. If it is used for both taxable and exempt activities, ITC must be apportioned and reversed proportionately under the statutory reversal/apportionment rules. Determination of entitlement requires clarity on who claims ITC, the nature of the output supplies, and whether those supplies are taxable or exempt. (AI Summary)