GST treatment of trading expenses clarifies applicable tax rates and conditions for input tax credit and reverse charge.
A categorical schedule assigns GST rates, supplier levy responsibility, reverse charge applicability, and input tax credit eligibility to expenses debited to Trading and Profit & Loss accounts. Zero rated employer/statutory items attract no GST or ITC; most commercial expenses carry specified GST slabs (5%, 12%, 18%, 28% or actual for goods/assets) with ITC generally available when used for business. Capital goods enjoy ITC subject to a pro rata reversal if disposed within five years. Notification No. 8/2017 exempts low value daily purchases from unregistered suppliers from recipient tax payment and reporting. (AI Summary)

Transitional input tax credit access denied causing potential double taxation; registered persons may seek restoration or legal challenge.
Non-availability of transitional input tax credit in initial GSTR-3B filings stems from staggered return deadlines and the absence or non-functionality of the TRANS1 migration facility on the GSTN, preventing registered persons from reflecting entitled transitional credit under Section 140. This operational gap causes denial of credit, potential double taxation and cash-flow burden, and the note recommends administrative demand for activation of credit mechanisms and, if unresolved, pursuing a public interest legal challenge. (AI Summary)