TaxTMI 
TaxTMI 
ITC UTILISATION AFTER REVERSAL UNDER REAL ESTATE
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....TC UTILISATION AFTER REVERSAL UNDER REAL ESTATE<br> Query (Issue) Started By: - Narayan Pujar Dated:- 18-4-2026 Last Reply Date:- 30-4-2026 Goods and Services Tax - GST<br>Got 3 Replies<br>GST<br>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 ano....
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....ther 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. Reply By YAGAY andSUN: The Reply: Your understanding is largely correct, with a small nuance. Under Rule 42 of CGST Rules, a developer ....
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....must reverse input tax credit (ITC) attributable to exempt supplies; such as sale of units after receipt of completion certificate. Once this reversal is properly done: • The remaining ITC is treated as eligible ITC. • It sits in the electronic credit ledger at the GSTIN level. • GST law does not track ITC project-wise after this stage. Can the....
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.... balance ITC be used for another project? Yes. The ITC left after reversal becomes part of the common pool and can be utilized for any taxable outward supply under the same GSTIN, including another real estate project. Key points to ensure: • Accurate reversal: The calculation under Rule 42 (and Rule 43 of CGST Rules, if applicable) must be correct. • Eligibil....
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....ity: The remaining ITC should not fall under blocked credits as per Section 17(5) of CGST Act. • Compliance trail: Maintain proper working papers, as authorities may review project-wise allocations during audits. Conclusion After reversal, ITC effectively loses project-specific identity and becomes fungible at the GSTIN level. Therefore, the balance ITC can be legitimately ut....
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....ilized for another project, subject to proper compliance. Reply By Shilpi Jain: The Reply: ITC remaining after reversal can be used for paying other liabilities under the same GSTN. Provided there is no restriction for paying the liability by using ITC. Reply By Pinnacle Tax Advisor: The Reply: There is no requirement to link eligible ITC with specific outward supplies once it becomes pa....
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....rt of the common credit ledger. ITC accumulated on services availed for one project can be utilized to discharge outward tax liability arising from another project under the same GSTIN. Several judicial precedents are available supporting this position.<br> Discussion Forum - Knowledge Sharing ....