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TaxTMI 
TaxTMI 
regarding ITC reversal as per rul 42 & 43
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....egarding ITC reversal as per rul 42 & 43<br> Query (Issue) Started By: - FARIDUDDIN AHMAD Dated:- 1-11-2023 Last Reply Date:- 5-11-2023 Goods and Services Tax - GST<br>Got 4 Replies<br>GST<br>sir one of my client received notice u/s 73 to reverse the ITC of Rs-1,92,409.66/-(SGST+CGST) as per the provisions of rule 42 & 43 on the exempt sale of fire wood amounting Rs-11,96,250/- generated during th....
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....e process of manufacturing of VINEER PATTA. he is registerd in GST as manufacturing unit. nature of bussiness is manufacturing of VINEER PATTA (Finished Goods) which attracts 18% GST. rae material required to manufacture finished goods are woods.ITC availed through GSTR 3B are eligible ITC for manufacturing of finished goods. kindly advise rule 42 & 43 is applicable in this case for reversal of IT....
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....C Reply By Yash Shah: The Reply: IMHO - When you are involved in partially supplying taxable supplies and partially exempt supplies, ITC would be restricted to the extent of taxable supplies (including zero rated supplies) and anything pertaining to exempt supplies have been reversed if availed. In your case, as you have done sale of fire wood which is exempt from GST, reversal under Rule 42 & 4....
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....3 is required to be undertaken. Reply By Padmanathan Kollengode: The Reply: I agree, if the raw materials are common credit for both taxable and exempt supply, then Reversal under rule 42 is inevitable. However, kindly ensure that the calculation is done correctly as per Rule 42. If any goods are used exclusively for supplying taxable goods being vineer patta, then full credit shall be availabl....
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....e for such goods (for eg, packing materials of vineer patta etc.) Many a times, department is treating the entire credit availed in credit ledger as common credit for purpose of reversal u/r 42. This may be incorrect. Reply By Shilpi Jain: The Reply: For an exempt sale of Rs. 11.96L a reversal of ITC of Rs. 1.92 crores looks absurd!! Also, in addition to the points mentinoed by the experts, se....
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....e if you can identify at invoice level whether the expense pertains to exclusive taxable supplies. So in that case as per rule 42(1)(m), credit can be fully availed in respect of such invoices. Reply By KASTURI SETHI: The Reply: 2023 (8) TMI 572 - IN RE : KARNANI FNB SPECIALITIES LLP<br> Discussion Forum - Knowledge Sharing ....