TaxTMI 
TaxTMI 
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"My Net ITC is already computed after the deduction as per Rule 42. Now, for refund calculation, am I again required to apply the proportionate formula by including exempted turnover in the adjusted total turnover? Wouldn't that amount to a double deduction?"
Adjusted Total Turnover Computation
01 Jul 2025 
2 Replies 
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Adjusted Total Turnover excludes exempt supplies, impacting refund ITC; report full ITC then apply Rule 42/43 reversals.
Rule 89(4)(E) defines Adjusted Total Turnover as including turnover in a State/Union territory and zero-rated/non-zero-rated services while excluding the value of exempt supplies other than zero-rated supplies for the relevant period. To prevent double deduction in refund claims, practitioners should record full ITC in 4A5, compute required reversals under Rule 42/43, and reflect those reversals in 4B so the refund computation uses the gross ITC adjusted by the mandated reversals. (AI Summary)
Rule 89(4)(E) defines Adjusted Total Turnover as including turnover in a State/Union territory and zero-rated/non-zero-rated services while excluding the value of exempt supplies other than zero-rated supplies for the relevant period. To prevent double deduction in refund claims, practitioners should record full ITC in 4A5, compute required reversals under Rule 42/43, and reflect those reversals in 4B so the refund computation uses the gross ITC adjusted by the mandated reversals. (AI Summary)