Applicability of Rule 42 in case of NBFC

[CASUNIL BHANSALI]

Under the scenario where an NBFC has engaged in the sale of securities and opted for ITC reversal as per Rule 38, is it obligated to made reversal as per Rule 42 also ?

[Shilpi Jain]

Once 38 is followed, rule 42 would not apply.

AI Summary

NBFCs opting for ITC reversal under Rule 38 are not required to reverse under Rule 42. An individual inquired whether a Non-Banking Financial Company (NBFC) involved in the sale of securities and opting for Input Tax Credit (ITC) reversal under Rule 38 is also required to make a reversal under Rule 42. The response clarified that if Rule 38 is followed, Rule 42 does not apply.