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

 

[KALLESHAMURTHY MURTHY K.N.]

Sir,

As per the query, your client is engaged in the supply of services for consideration whether it may be a truck registered or unregistered in your client's name. Other trucks used were not registered in your client's name, which means there was hiring. If ITC is attributable to such a truck, then ITC has to apportion under Rule 42 for nil-rated supplies. If ITC is not involved in such circumstance, ITC is not required to apportion but the burden of proof lies on your client. In case of not required to apportion at the hands of your client, the owner of the truck is not entitled to avail ITC.

AI Summary

Input tax credit apportionment may be required for nil-rated supplies under the apportionment rule; supplier bears burden of proof.
If ITC is attributable to hired trucks used for nil-rated supplies, the ITC attributable to those supplies must be apportioned under the applicable apportionment mechanism; if ITC is not attributable, apportionment is not required, but the burden of proof to show non-attribution lies on the supplier, and the owner of the hired truck is not entitled to claim ITC in respect of the supplier's inputs.