ITC on Prepaid expense

[Narayan Pujar]

Hi,

Is there a need to reverse Input Tax Credit on prepaid expenses? Are there any case laws in this regard.

Thank you in advance.

AI Summary

Debate on GST Forum: Should Input Tax Credit be Reversed for Prepaid Expenses? Section 13(2) of CGST Act Discussed. A discussion on the Goods and Services Tax (GST) forum addresses whether Input Tax Credit (ITC) needs to be reversed on prepaid expenses. One participant suggests that no reversal is necessary, referencing Section 13(2) of the CGST Act, which allows ITC to be availed on or after the service invoice date. Another participant seeks clarification on the query, while a third requests specific examples of prepaid expenses. The original poster provides an example involving fire insurance for stock, questioning eligibility for ITC when expenses span multiple fiscal years. Another participant agrees with the initial response.