Input Tax Credit Reversal in case of Religious Trust

[Mihir Modak]

Donations are collected by temple in Donation Box. There is no 'supply' involved in this. The same is not considered as exempt supplies as there is no 'Supply.

As per Rule 42, the ITC needs to be reversed in case of exempted supplies. While applying the formula for calculation whether 'Donations' will form Part of turnover or the same should be ignored as there is NO Supply?

 

[Mihir Modak]

Also whether the Donation amount should be considered for calculation of Turnover for GSTR-9/9C? 

[Shilpi Jain]

Donations should not be considered for calculation for rule 42 as it is not a supply.

AI Summary

Input Tax Credit reversal: donations in donation boxes are not treated as supplies and excluded from turnover calculations. The question is whether temple donations constitute a 'supply' and must be included in turnover for Rule 42 ITC reversal and GSTR 9/GSTR 9C. The discussion records the view that such gratuitous donations are not supplies, and therefore are not treated as exempt supplies for Rule 42 and should be excluded from turnover when computing ITC reversal and annual return reconciliation.