ITC UTILISATION AFTER REVERSAL UNDER REAL ESTATE

[Narayan Pujar]

For a real estate project, under GST, Rule 42 requires reversal of credit after receipt of completion certificate. Suppose after reversal, I am still left with considerable ITC. Can it be utilised for another project under the same GSTIN?

I believe, once reversal is done, the remaining ITC becomes a part of the common pool of ITC and no more carries the project specific tagging. Hence, the remaining ITC can be used in another project also.

Please guide.

AI Summary

Input tax credit reversal in real estate can leave usable common credit for another project under the same GST registration.
Input tax credit remaining after reversal under Rule 42 in a real estate project may be treated as eligible common credit at the GSTIN level, rather than continuing to retain project-specific identity. Once the credit attributable to exempt supplies is duly reversed, the balance ITC can be used against taxable outward liabilities arising from another project under the same GST registration, subject to eligibility and the blocked credit provisions. Accurate reversal and supporting records remain important for audit purposes.