TaxTMI 
TaxTMI 
2022 (3) TMI 573
X X X X Extracts X X X X
X X X X Extracts X X X X
....ferred to as the CGST Act and KGST/SGST Act respectively). The applicant produce bank notes conforming to International Standards set by Central Banking & Monetary Authorities of the world and makes them available in adequate quantities to the Reserve Bank of India at competitive prices. 3. The applicant has sought advance ruling in respect of the following questions: a. Whether ITC can be claimed by the applicant on common services such as CISF & Township Security Services, Maintenance of Water Treatment Plant, Horticulture, Maintenance of Residential Quarters, Maintenance of Information System (Computers, Software & Electronic Equipment), Maintenance of Sewage Treatment Plant, etc. which are utilized for both taxable as well as exempted supply of Varnika (IMU) and printing press of rupee note located in Mysuru Unit? b. Whether method followed by the applicant in connection with claiming of Input Tax Credit is in accordance with the provisions of law? c. Turnover of which financial year to be considered in Rule 42 of the CGST Rules, 2017 while calculating ineligible ITC for the invoices which were accounted in the books of accounts in the FY 2019-20, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ning of financial year, and both Mysuru Unit and Salboni Unit will make their procurement of raw materials based on printing requirement which is allotted by corporate office for the period. The applicant states that they are engaged in outward supply of sale of rupee notes which are printed in the Mysuru Unit and sent to RBI on agreed rate of cost-plus margin basis where the said supply of Rupee Notes to RBI is wholly exempted from levy of GST vide S.No. 117 of Notification No. 2/2017 of Central Tax (Rate) and S.No. 117 of Notification No. 2/2017 of Integrated Tax (Rate). 5.4 The applicant states that the Mysuru unit, in addition to the printing press unit, has an exclusive Ink Manufacturing Unit called as "Varnika" (hereinafter referred to as "Varnika (IMU)") engaged in manufacturing of ink which is used for printing of rupee notes. The ink manufactured by the Varnika (IMU), is captively consumed by the Mysuru unit for printing of rupee note as well as the said ink is also transferred to Salboni unit, the branch of the company located in West Bengal for printing of rupee note. Further, the manufactured ink by the Varnika (IMU) is also sold to M/s. Security Printing and Minting....
X X X X Extracts X X X X
X X X X Extracts X X X X
....k produced multiplied by the cost of production of ink. Accordingly, the company has paid IGST on the said "Import of Services" under reverse charge mechanism (RCM) as a recipient of service and claims Input Tax Credit. As per the books of accounts of printing press following are the inward supplies used for manufacturing of rupee note such as paper, spares, consumables, packing materials, services in connection with repairs and maintenance of printing plant and many other expenses incurred in printing press. As the inward supplies are used exclusively for manufacturing of rupee note which is an "exempted supply", the applicant has not claimed or availed the input tax credit in the aforesaid inward supplies. On all the inventory items such as raw materials, spares, consumables and packing materials which are transferred to Salboni unit by the applicant, the applicant has claimed input tax credit, on the relevant inward supply of goods to the extent such items which are transferred, being a taxable outward supply. 5.6 In addition to the above inward supply, following are facilities which are shared in common by the Varnika (IMU) and printing press in Mysuru Unit such as ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... through an outsourced agency by way of an annual maintenance contract. (vii) Maintenance of Sewage Treatment Plant: Waste water generated in the printing press, Varnika (IMU), residential area and BNPMIPL paper mill are treated in sewage treatment plant and used for gardening purpose, the Operations and Management of STP including necessary manpower is outsourced by the applicant. The applicant states that they have proportionately claimed input tax credit on the above-mentioned inward supply of goods or services or both which are used in connection with manufacturing of ink and rupee note as the said common facilities are used for both taxable and exempted supply, they have reversed ITC to the extent of exempted supply. They have claimed the proportionate credit to the extent of taxable supply. 5.7 Input Tax Credit availed by the Applicant: As the ink manufactured in the Varnika (IMU) is captively consumed at Mysuru unit, plus transferred to Salboni unit, being a taxable supply under GST after discharging tax on such supply at applicable rate as per Schedule I of the CGST Act, 2017 and the said ink manufactured by Varnika (IMU) is also sold to SPMCIL....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lation for Varnika (IMU) for the F.Y 2019-20 Particulars of Input Tax Credit Total ITC Available ITC 100% eligible Common Credit (C=A-B) Proportionately Ineligible ITC as per Rule 42 (D) Eligible ITC for F.Y. 19-20 (E=B+C-D) (A) (B) (C) (D) (E) CGST 12,28,608 1,10,738 11,17,870 9,29,408 2,99,200 SGST 12,28,608 1,10,738 11,17,870 9,29,408 2,99,200 IGST 68,47,643 - 68,47,643 56,93,197 11,54,446 Import of Goods IGST 42,49,32,370 - 42,49,32,370 35,32,92,890 7,16,39,480 Import of Service IGST 22,24,840 - 22,24,840 18,49,753 3,75,086 RCM - CGST 53,052 7,723 45,329 37,687 15,367 RCM -SGST 53,052 7,723 45,329 37,687 15,367 RCM -IGST 4,10,035 - 4,10,035 3,40,907 69,128 Subtotal (A) 43,69,78,209 2,36,923 45,329 37,687 36,31,10,938 7,38,67,272 Where, (A) - Total input tax credit availed on goods and services which are used during the year by the applicant on account of manufacturing of ink in Varnika (IMU). As per Rule 42 this will be denoted as "T". (B) ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Horticulture, Maintenance of Residential Quarters, Maintenance of information system (Computers, software and electronic equipment), Maintenance of Sewage Treatment Plant, etc. including inward supply of services on which tax payable under RCM. The applicant has stated that they have not availed any ITC on inputs, input services or capital goods which are exclusively used for Exempted Supply or Other than Business purposes. The applicant has not claimed any ITC on Goods or Services which are blocked for availment as per Section 17 (5) of the CGST Act, 2017. ITC Calculation for Press & Varnika (IMU) for the F.Y 2019-20 Particulars Of ITC Total ITC available (A) ITC 100% eligible (B) Common Credit (C = A-B) [Proportionately] Ineligible ITC as per rule 42 (D) Eligible ITC for F.Y 19-20 (E = B + C -D) CGST 43,20,969 - 43,20,969 35,92,495 7,28,474 SGST 43,20,969 - 43,20,969 35,92,495 7,28,474 IGST 8,77,345 3,96,647 4,80,698 3,99,657 4,77,688 RCM CGST 1,06,85,035 - 1,06,85,035 88,83,642 18,01,393 RCM SGST 1,06,85,035 - 1,06,85,035 88,83,642 18,01,393 RCM IGST 3,10,80,51....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... other than business. Hence the need of the other variables as per Rule 42 of the CGST Rules is not warranted. As explained and tabulated above, the applicant has maintained two separate books of accounts for the purpose of Varnika (IMU) separately and similarly for the Printing Press separately in the Mysuru Unit and availed ITC based on above calculation as per Rule 42 of the CGST Rules, 2017 amounting to Rs. 8,46,44,567/- for the F.Y 2019-20. Similarly, the applicant has not availed any ITC on Inputs, Input Service, Capital Goods which are exclusively used for Exempted Supply or ITC on Blocked or In-eligible Credit as per Section 17(5) of the CGST Act, 2017 apart from the above the applicant has also reversed a proportionate ITC amounting to Rs. 41,43,03,508/- which are commonly used for both taxable and exempted supply during FY 2019-20 as per Rule 42 of the CGST Rules, 2017. 5.9 Belated claim of ITC & Reversal of ITC: The applicant has claimed the ITC pertaining to previous financial year in subsequent financial year within the time prescribed as per Section 16 (4) of the CGST Act, 2017. During the financial year 2019-20, on goods or services which the applicant is el....
X X X X Extracts X X X X
X X X X Extracts X X X X
....upply which attract nil rate of tax, where the goods or services are liable to Nil rate of tax and non-taxable supply are activities or transaction notified by Government which are covered under Section 7(2)(b) of the CGST Act, 2017 read along with Schedule III of the CGST Act, 2017 the transactions which are neither considered as supply of goods nor supply of services. The activities described therein will not be chargeable to GST. Hence, they will be considered as a non-taxable supply. In the case of the applicant the said activity of supplying rupee note to RBI will be considered as "Exempted Supply". 6.4 The applicant in Mysuru unit also has an ink manufacturing facility called as Varnika (IMU) under the same GSTIN which is engaged in manufacturing of ink, the said ink manufactured in Varnika (IMU) is captively consumed by the Printing Press Unit in Mysuru unit towards printing of rupee note as well as the said ink manufactured by Varnika (IMU) is also transferred to the Salboni Unit for the purpose of printing rupee notes. In addition, the Mysuru unit also transfers inventory items occasionally on case to case basis such as raw materials and packing materials to Salboni uni....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Where a person who has obtained or is required to obtain registration in a State or Union territory in respect of an establishment, has an establishment in another State or Union territory, then such establishments shall be treated as establishments of distinct persons for the purposes of this Act ..." 6.9 Similarly, the said Ink manufactured by Varnika (IMU) is also sold to 'SPMCIL' which is a supply as per Section 7(1)(a) of the CGST Act, as mentioned above and the applicant has discharged necessary tax liability at applicable rate being a taxable supply under GST on both such activities or transactions which are leviable to GST. 6.10 The applicant is in receipt of inward supply of goods and services in connection with manufacture of ink and rupee note in Mysuru unit. The applicant claims ITC on inward supply of goods and services in accordance with Section 16 of the CGST Act, 2017. The provision is reproduced below for reference; "16. (1) Every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49, be entitled to take credit of input tax charged on any supply of goods or services or....
X X X X Extracts X X X X
X X X X Extracts X X X X
....goods or services or both along with tax payable thereon. (3)........ (4) A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the due date of furnishing of the return under section 39 for the month of September following the end of financial year to which such invoice or debit note pertains or furnishing of the relevant annual return, whichever is earlier." As per Section 16 of the CGST Act, it is clear that ITC would be available on fulfillment of the following conditions: On perusal of Section 16 of the CGST Act, the goods or services supplied should be used by the applicant being the registered person it must be used or intended to use them in the course or furtherance of his business. 6.11 Condition for availment of ITC: i. The registered person should be in possession of tax invoice. ii. The said goods or services must have been received. iii. Returns must have been filed under Section 39 of CGST Act, 2017. iv. Subject to the provisions of Sec 41, the tax charged in respect of supply has been actually paid to the go....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cillary to trade, commerce, manufacture or profession, the said activity will be considered as business, irrespective of the activity or transaction in the nature of trade, commerce, manufacture or profession whether or not there is volume, frequency, continuity or regularity of such transaction. The term 'business' has been defined so widely, which includes any activity or transaction in connection with business. The word 'business' has been extremely widely defined, further in Section 16 (1) of ibid., it is preceded by the words "in the course or furtherance of', it's import can be known through the following cases: In the case of State of Tamil Nadu Vs Board of Trustees of the Port of Madras (1999) 4 SCC 630, it was observed as follows: 15. ...This itself shows that the Legislature has recognized that the word 'business' is wider than the words 'trade, commerce or manufacture, etc.' The word 'business' though extensively used is a word of indefinite import. In taxing statutes, it is normally used in the sense of an occupation, a profession - which occupies time, attention and labour of a person, normally with a profi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rust to be used for advancement of the objects of the trust. The Revenue held that the activity of publications and sale of books, etc, amounted to 'business'. Relying on the case of Board of Trustees of the Port of Madras (supra), the court observed as follows: ... It was clear from the trust deed and objects contained therein that it was not established with an intention of carrying on the business/ occupation of selling or supplying goods. That being the position, it could not be said that the trust carried on the business of selling and supplying goods so as to fall within the meaning of 'dealer' under section 2(11)..... 6.15 The definition of 'business' given in section 2(5A) even without profit motive is wide enough to include any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture and any transaction in connection with or incidental or ancillary to the commencement or closure of such trade, commerce, manufacture, adventure or concern. If the main activity is not business, then any transaction incidental or ancillary would not normally amount to 'business' unless an independent ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... course' is defined in "The Law Lexicon - The Encyclopaedic Law Dictionary - 4th Edition" as the expression "in the course" implies not only a period of time during which the movement is in progress but postulates a connected relation. Sale in the course of export out of the territory out of India means sale taking place not only during the activities directed to the end of exportation of the goods out of the country but also as part of or connected with such activity. Mohd. Serajuddin v. State of Orissa, AIR 1975 SC 1564. See also Member, Board of Revenues V. Swaika Oil Mills, AIR 1977 SC 2008. 6.22 The word 'course' conveys the idea of a gradual and continuous flow, and advance, a journey, a passage or progress from one place to another. Etymologically, it means and implies motion, a forward movement. State of Travancore Cochin v. Shanmugha Vilas Casheunut Factory, AIR 1953 SC 333, 346. [Art. 286 (1) (b), Constitution of India] 6.23 In the course of means 'during' the winding up. Jadunath Roy. V. Bank of Calcutta Ltd., AIR 1952 Cal 506. [Banking Companies Act, 1949, S. 45A & 45-B] The Expression "in the course of" in Art 286 (1) (b) postulates that the t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nance of Residential Quarters, (v) Maintenance of information system (Computers, software and electronic equipment) (vi) Maintenance of Sewage Treatment Plant, etc. would be entitled as eligible ITC as they are used in the course or furtherance of business of both Varnika (IMU) and Printing Press unit. 6.27 As far as residential quarters in the township is concerned, the following precedents show that credit of input taxes on common inputs and input services used therein can be claimed by the assesse. 6.28 In Reliance Industries Ltd Vs Commissioner of Central Excise and Service Tax (LTU) 2016 (42) STR 457 (Tri-Mum), it was held that cenvat credit on input services such as construction services, repairs and maintenance services, security services, manpower recruitment services and works contract services used in residential colony of employees attached with factory must be allowed as factories are located in remote areas and for smooth running of business, residential colony for employees necessary near factory. It was settled law that if value of input services is included in the assessable value on which central excise duty was discharged on finished goods, they would consti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ut services and the appellants entitled to avail credit of tax paid on security services utilized for residential purposes. The same was again held in another case of the same appellant as reported in 2009 (16) STR 89 (Tri-Ahmd). 6.33 In ITC Ltd Vs Commissioner of Central Excise 2010 (17) STR 146 (Tri-Bang), credit of service tax availed on services used for maintenance of staff colony would be eligible and consequently security agency, labour supply, advertising, repair and maintenance, rent-a-cab, manpower recruitment and business auxiliary services were considered input services for which credit would be availed. It was held that manufacture would not feasible if residential accommodation for employees not provided near factory and the appellant-assessee was under an obligation to maintain such colony. The Tribunal further held that services like lawn mowing, garbage cleaning, maintenance of swimming pool, collection of household garbage, harvest cutting, weeding, etc are also input services and credit would be eligible thereon. This case was also upheld by the High Court of Andhra Pradesh as reported in 2013 (32) STR 288 (AP). The High Court observed that staff colony provid....
X X X X Extracts X X X X
X X X X Extracts X X X X
....) & 17(6) of the CGST Act, 2017 r.a.w Rule 42 of the CGST Rules, 2017. 7.2 The Mysuru units, Varnika (IMU) finished goods being ink, is stock transferred as such to Salboni unit, and sold to SPMCIL and the remaining quantity of Ink so manufactured has been used by the Mysuru unit for printing of rupee note in Mysuru Unit, supply of such rupee note being exempt from levy of GST. The activity of inter-unit transfers by the Varnika (IMU) to printing press for manufacture of rupee note division, which is captively consumed within the Mysuru unit, finally used for printing of bank notes, is also exempted from levy of GST. 7.3 As per Sec 16(1) of the CGST Act, 2017, every registered person is eligible to claim ITC subject to such conditions and restrictions, on any supply of goods or services provided such goods or services are used or intended to be used in the course or furtherance of business. The provision is reproduced below for reference; "(1) Every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49, be entitled to take credit of input tax charged on any supply of goods or services or bo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ons of Rule 42 of the CGST Rules, 2017 reproduced below: "42. Manner of determination of input tax credit in respect of inputs or input services and reversal thereof: - (1) The input tax credit in respect of inputs or input services, which attract the provisions of sub-section (1) or sub-section (2) of section 17, being partly used for the purposes of business and partly for other purposes, or partly used for effecting taxable supplies including zero rated supplies and partly for effecting exempt supplies, shall be attributed to the purposes of business or for effecting taxable supplies in the following manner, namely, - (a) the total input tax involved on inputs and input services in a tax period, be denoted as 'T'; (b) the amount of input tax, out of T', attributable to inputs and input services intended to be used exclusively for the purposes other than business, be denoted as 'T1'; (c) the amount of input tax, out of 'T', attributable to inputs and input services intended to be used exclusively for effecting exempt supplies, be denoted as 'T2'; (d) the amount of input tax, out of T', in respect of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....be included in 'T1' and 'T2' respectively, and the remaining amount of credit on such inputs or input services shall be included in 74'. (2) Except in case of supply of services covered by clause (b) of paragraph 5 of the Schedule II of the Act, the input tax credit determined under sub-rule (1) shall be calculated finally for the financial year before the due date for furnishing of the return for the month of September following the end of the financial year to which such credit relates, in the manner specified in the said sub-rule and- a. where the aggregate of the amounts calculated finally in respect of 'D1' and 'D2' exceeds the aggregate of the amounts determined under sub-rule (1) in respect of D1' and 'D2', such excess shall be reversed by the registered person in FORM GSTR-3B or through FORM GST DRC-03 in the month not later than the month of September following the end of the financial year to which such credit relates and the said person shall be liable to pay interest on the said excess amount at the rate specified in sub-section (1) of section 50 for the period starting from the first day of April of the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d to the purposes of business and for effecting supplies other than exempted supplies but including zero rated supplies for the tax period 7.7 The applicant should have claimed the ITC and determined the proportionate ITC to be reversed on periodical basis, based on the above-mentioned formula for a tax period (month) and continue the same based on the above-mentioned variables numbers available for each month. Similarly, after end of the financial year, as the annual numbers for the above said variables are available, based on above formula the proportionate ITC to be reversed will be recomputed, upon determination of such amount of proportionate ITC for a financial year, which shall be final for that financial year. The same will be compared with, the aggregated amount of proportionate ITC reversed on monthly bases by the applicant, which results in excess or short reversal of proportionate ITC. In case of short reversal by the applicant, the differential amount need to be reversed along with interest as per Section 50 (1) of the CGST Act, 2017 and in case of excess reversal, the same can be reclaimed by the applicant, before the due date for filing return for the month of Sep....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... = [Rs. 49,89,48,074 -(0 - 0 - 0)] C1 = Rs. 49,89,48,074/- 7.11 Further, ITC on Input & Input Services used exclusively for making taxable supplies is considered as "T4" as the applicant has not involved in any supply of goods are services, which are exclusively used for making taxable supply, but for inventory items on case to case basis are supplied from Mysuru Unit which are stock transferred to Salboni Unit which are leviable to GST, on such items the applicant has claimed ITC and Forwarding Charges on Sale of Ink to SPMCIL as the said supply is exclusively used for taxable supply ITC on such goods and services claimed during the FY 2019-20 amounts to Rs. 6,33,570/- on inputs which are used for the above mentioned identified Taxable Supplies being exclusively used for Other than Exempted Supply including Zero Rates Supply, which is referred as (T4), which results in dete....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... supplies other than exempted supplies but including zero rated supplies and shall be denoted as C3, where C3 = [C2 - (D1+D2)], for the financial year the amount of ITC eligible will be Rs. 8,46,44,567/-[Rs. 49,83,14,504 - (Rs. 41,43,03,507 + Rs. 0)], is availed by the applicant for the said financial year. As the entire credit was claimed by the applicant in the September 2020 return filed by the applicant for the FY 2019-20, the reversal of ITC as per Rule 42(2) of the CGST Rules, 2017 for the financial year as a whole is not warranted. 7.16 The applicant has claimed the ITC pertaining to previous financial year in subsequent financial year within the time prescribed as per Section 16(4) of CGST Act, 2017. During the financial year 2019-20, on goods or services which the applicant is eligible to claim ITC, was omitted to be considered and claimed as ITC during FY 2019-20. 7.17 The said claim of ITC was availed by the applicant in the return filed during the month of September 2020, as per the provisions the applicant is entitled to claimed the said ITC during Financial Year 2020-21 upto September 2021 return filing due date or filing of Annual Return, whichever is earlier a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the Act, the input tax credit determined under sub-rule (1) shall be calculated finally for the financial year before the due date for furnishing of the return for the month of September following the end of the financial year to which such credit relates, in the manner specified in the said sub-rule and - (a)....... "(Emphasis Supplied) 7.21 The applicant understands, when goods or services or both are used by the registered person partly for effecting taxable supplies including zero-rated supplies under the CGST Act or under the IGST Act and partly for effecting exempt supplies under the said Acts, the amount of credit shall be restricted to so much of the input tax as is attributable to the said taxable supplies including zero-rated supplies and the amount of credit to be reversed will be determined as per manner prescribed. As per Rule 42 (1) of the CGST Rules, 2017 the term 'T' denotes total input tax involved on inputs and input services in a tax period, the Input Tax Credit available during the month shall be denoted. When the said rule is used for computation of reversal of ITC on annual basis for the financial year as a whole as per Rule 42(2) of the CGST....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e as well as exempted supplies. 12. In view of the above, the applicant sought advance ruling in respect of the questions mentioned at para 3 supra. We proceed to consider & discuss these questions, one at a time. 12.1 The first question is "Whether ITC can be claimed on common services which are utilized for both taxable as well as exempted supplies?" This question is not covered under the issued referred to in Section 97 (2), in respect which an applicant can seek advance ruling, as the ITC of the tax paid on common services, utilized for both taxable as well as exempted supplies is governed under Section 17 (2) of the CGST Act 2017 read with Rule 42 of the CGST Rules 2017. 12.2 However, it appears that the applicant intends to know the admissibility of ITC of tax paid or deemed to have been paid on common services such as CISF & Township Security Services, Maintenance of Water Treatment Plant, Horticulture, Maintenance of Residential Quarters, Maintenance of Information System (Computers, Software & Electronic Equipment), Maintenance of Sewage Treatment Plant etc., which are utilized for both taxable as well as exempted supplies of Varnika (IMU) and printing press of ru....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fecting exempt supplies, as per Rule 42 of the CGST Rules 2017. Therefore the applicant has to check each and every supply in the manner mentioned above and then decide whether they are entitled to avail the credit and if so to what extent. 12.5 The applicant further contends that the impugned input services are in relation to residential quarters and hence quoting some case laws claim that they are entitled to claim the credit on the said common inputs / input services. Some of the case laws held that the credit can't be denied if the cost of the said inputs/input services are included in the value of manufactured goods. The applicant is silent on the said issue of inclusion of the cost in the value of manufactured goods. 12.6 Now we proceed to examine the entitlement of various credits, by considering one at a time. a) CISF Services : The applicant submitted that they are having an MOU with the Ministry of Home Affairs for utilizing the services of CISF for the safety and security of Mysuru unit, as it is a highly sensitive place, which consists of Printing Press, Varnika (IMU) and residential township for employees & CISF. The CISF guards the entire area of Pr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pread around 337 acres, including landscaping, gardening etc., through outsourced manpower. It is observed that the services of landscaping, gardening through outsourced manpower is not related to the business of the applicant. Therefore, the credit is not available to the applicant on the said services used. e) Maintenance of residential quarters : The applicant have provided residential accommodation to its employees within the township in the residential quarters. The day to day repair & maintenance of civil, electrical works of the township are outsourced by way of Annual Maintenance Contract. It is observed that the said AMC is not related to the business of the applicant. Therefore, the credit is not available to the applicant on the said services used. f) Maintenance of Information System : Maintenance of information system and networking of the applicant company is carried out through an outsourced agency by way of an Annual Maintenance Contract. The applicant has not clearly specified that the said maintenance pertains to printing press or Varnika (IMU) or both. The credit of the said maintenance will not be available if it pertains to o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d supplies of goods or services are used for both taxable and exempted supplies and the applicant is entitled to avail the input tax credit, on the said goods or services, to the extent of taxable outward supply. The amount of ITC to be reversed proportionate to taxable outward supply need to be determined as per Section 17 (2), 17(6) of the CGST Act 2017, read with Rule 42 of the CGST Rules 2017, for a particular financial year. The applicant contended that they maintain separate books of account for Varnika (IMU) and for printing press wherein rupee note is manufactured and hence they determined the ITC claims separately for the said verticals. The applicant needs to combine all the credits pertaining to both the verticals to arrive at their claim of ITC, in terms of Rule 42 of the CGST Rules 2017, as they have a single registration for the premises at Mysuru. 12.8 Now we proceed to consider & examine the third question i.e. Turnover of which financial year to be considered in Rule 42 of the CGST Rules, 2017 while calculating ineligible ITC for the invoices which were accounted in the books of accounts in the FY 2019-20, however ITC was claimed during April to September of ....