NIL Rated Supply and ITC Reversal

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....IL Rated Supply and ITC Reversal<br> Query (Issue) Started By: - Kaustubh Karandikar Dated:- 16-10-2021 Last Reply Date:- 24-10-2021 Goods and Services Tax - GST<br>Got 6 Replies<br>GST<br>XYZ among other services, is also supplying the services of freight forwarding i.e., transportation of goods by Sea for export. As per the exemption notification, this service attracts 'Nil' GST and therefore XY....

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....Z are not paying GST on these amounts recovered from the Indian client. Is XYZ required to proportionately reverse the ITC for supplying these 'Nil' rated services? In my view yes they are required to reverse. Views of the experts please. Reply By Shilpi Jain: The Reply: Yes reversal would be required. However, if he can convert himself as a pure agent then no reversal of ITC would be required.....

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.... Reply By Shilpi Jain: The Reply: I mean if he can act as a pure agent to the exent of the value of this exempt services, ITC reversal will not be required. Reply By Kaustubh Karandikar: The Reply: Madam, XYZ is supplying the services under forward charge with mark up. Therefore, it is not a reimbursement of expenses at actuals and therefore cannot be fitted in to the definition of &#39;Pure A....

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....gent&#39;. Therefore, in my view, proportionate ITC needs to be reversed. Your kind views please. Reply By RAMASWAMY Advocate: The Reply: yes, the concept of &quot;pure Agent&quot; does not arise in this issue in my view. Reply By Shilpi Jain: The Reply: Sir if the margin on freight can be added to the other services provided or if the margin can be disclosed separately then pure agent is poss....

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....ible to be satisfied. But if it is not feasible to do (which is the fact in many cases) then reversal will be required. Reply By KASTURI SETHI: The Reply: As per the query, (emphasis is on &#39;among other services&#39; i.e. inter alia), the definition of &#39;pure agent&#39; cannot be fitted in this scenario. It will be square peg in a round whole. The words, &#39;Ifs&#39; and &#39;buts&#39; s....

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....tand for hypothetical situation.<br> Discussion Forum - Knowledge Sharing ....