ITC Reversal as per Rule 42

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....TC Reversal as per Rule 42<br> Query (Issue) Started By: - LAKSHMINARAYANAN TR Dated:- 1-3-2018 Last Reply Date:- 3-3-2018 Goods and Services Tax - GST<br>Got 3 Replies<br>GST<br>If more than one business vertical are under same GSTIN itself, while applying Rule 42 for ITC Reversal- Total Turnover of entire GSTIN to be taken or same can be split into segment wise also ? For ex:- Say, under one GS....

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....TIN there exists three Business Vertical - Hotel, Courier & Plastic. Hotel vertical has taxable and exempt supplies to calculate ITC Reversal for common input credit can we use the following Common ITC (of Hotel Vertical) * Exempted Supply in Hotel Vertical ---------------------------------------------------------------------------------------------- Total Supply of Hotel Vertical Or We have t....

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....o consider the Total supply of all vertical (for the denominator) Experts advice Please. Reply By Ganeshan Kalyani: The Reply: first you have arrive at ITC attributable to hotel vertical from total ITC. then from the ITC of hotel you have to apply the formula which you have mentioned in your query. Reply By LAKSHMINARAYANAN TR: The Reply: Dear Sir, Let me reiterate with clear examples. All t....

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....he verticals are registered under the one GSTIN only. Say turnover of each vertical is &#8377; 10L each. Total Sales &#8377; 30L. Plastic unit is fully exempt. No ITC availed all inputs and input services of Plastic Unit. Hotel Unit - Say Taxable is &#8377; 7L and exempt is &#8377; 3L. Common Credit &#8377; 10000. Courier Unit - Fully Taxable services. &#8377; 10L Now to apply Rule 42 on &#83....

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....77; 10000/- which formula is correct ? 10000 * 3L/10L = &#8377; 3000/- + 500 (5% of 10000) OR 10000*13L/30L = &#8377; 4333/- + 500 Experts advice please. Reply By Ganeshan Kalyani: The Reply: turnover of plastic, hotel and courier division put together is &#8377; 30 lacs. total common input tax credit is &#8377; 10 thoudand. formula 10,000 x 10 lacs &divide; 30 lacs = &#8377; 3,333/- ( it ....

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....means out of common credit of &#8377; 10 thousand , &#8377; 3,333/- is attributable to each division say, plastic, hotel and courier &#8377; 3,333/- of plastic division is ineligible credit. &#8377; 3,333/- of courier division is fully creditable . &#8377; 3,333/- of hotel division need further birfucate into tax attributable to taxable product and exempt product. Formula : 3,333 x 7 lacs &di....

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....vide; 10 lacs = 2,333. Here, &#8377; 2,333/- is eligible credit. hope your query is resolved from above example.<br> Discussion Forum - Knowledge Sharing ....