section 17(2) itc reversal

[AMAR GONDIYA]

Respected sir or madam

My client have registered transporter having own truck he supply both service taxable as 12% and 18% and also work as nil rated supply of other truck in such case can department reverse ITC u/s 17(2) as propossed ITC compare with Nil Rated Supply in which registered truck not used.

Also in rules we can't take Nil Rated or Exempt Supply Income in books

Tks

 

AI Summary

Transporter Must Apportion ITC for Nil-Rated Supplies Under Rule 42 When Using Hired Trucks per GST Section 17(2). A registered transporter provides both taxable services at 12% and 18% and nil-rated services using hired trucks. The query concerns whether the department can reverse Input Tax Credit (ITC) under Section 17(2) of the GST Act, comparing proposed ITC with nil-rated supply where registered trucks are not used. The response clarifies that if ITC is attributable to hired trucks, it must be apportioned under Rule 42 for nil-rated supplies. If ITC is not involved, apportionment is unnecessary, but the client must prove this. If apportionment is not required, the truck owner cannot claim ITC.