My case is under assessment, officer is not accepting the rule 42 calculation made by us, and he has alo presented his calculation,
i am explaning with illustration

Eg.
We are trader as well as manufacturer, we used to trade exempt items and taxable items, and products outcome of manufacturers.
Following are the data, based on that calculate reversal of ITC as per rule 42 of the CGST Act.
Total Inward Supplies – Rs.10,00,000 bifurcated as below:
Wheat (Exempt) – 2,00,000
Cotton (Processed) (Not require to manufacturer, available to sale in pack to pack condition) Rs. 3,00,000 ITC on the same Rs. 15,000
Cotton(Unprocessed- require in manufacturer) Rs. 5,00,000 ITC on the same is Rs. 25,000


Now Total Outward supplies are Rs. 11,75,000 which is as below:-
Wheat (Exempt) – Rs. 2,50,000
Cotton Processed (Not required in manufacture)- Rs. 3,50,000 output Tax on the same is Rs. 17,500
Out of unprocessed cotton manufacturing process manufacture goods output is Processed Cotton & Oil (Taxable) Rs. 5,25,000 tax on the same is Rs. 20,000, and by product cattle feed of Rs. 50,000 – Exempt not liable for GST.

Calculation presented by US:

Step 1: Breakdown of Inputs and ITC
Total Inward Supplies – ₹1,000,000
1. Cotton (Processed - Not required in manufacturing): ₹300,000
o ITC: ₹15,000
2. Cotton (Unprocessed - Used in manufacturing): ₹500,000
o ITC: ₹25,000
o
Step 2: Breakdown of Outward Supplies
Total Outward Supplies – ₹1,175,000
1. Cotton Processed (Not required in manufacturing): ₹350,000
o Output Tax: ₹17,500 (Taxable supply)
2. Processed Cotton & Oil (Taxable): ₹525,000
o Output Tax: ₹20,000 (Taxable supply)
3. By-product Cattle Feed (Exempt): ₹50,000
o Exempt supply (no ITC available for this).

Step 3: Calculate Exempt Turnover for ITC Reversal
Exempt Turnover (based on outward supplies):
• Exempt Supplies: ₹50,000 (Cattle Feed)
• Taxable Supplies: ₹350,000 (Processed Cotton) + ₹525,000 (Processed Cotton & Oil) = ₹875,000
• Total Turnover = ₹50,000 (Exempt) + ₹875,000 (Taxable) = ₹925,000
Exempt Turnover Ratio:
Exempt Turnover Ratio= Exempt Turnover = 50000 = 0.0540 5(≈5.4%)
Total Turnover 925000

Step 4: Reversal of ITC on Common Inputs (Cotton Unprocessed)
• ITC on Cotton (Unprocessed): ₹25,000 (this is the common input used for both taxable and exempt supplies).
ITC to be Reversed (as per Rule 42):
ITC to be Reversed = ITC on Common Inputs × Exempt Turnover Ratio

=25,000×0.05405

=₹1,351.25 (rounded to ₹1,351)


Step 5: Final ITC Available for Claim
• ITC exclusively for taxable supplies (Cotton Processed - Not used for manufacturing): ₹15,000
• Available ITC on Common Inputs (Cotton Unprocessed):

Available ITC on Common Inputs = 25,000 − 1,351 = ₹23,649
• Total ITC Available:
Total ITC Available = ₹15,000 + ₹23,649 = ₹38,649


Summary of ITC Reversal:
• Total ITC Claimed: ₹40,000 (₹15,000 + ₹25,000)
• ITC Reversed: ₹1,351
• Net ITC Available: ₹38,649


calculation suggest by officer:

Step 1: Breakdown of Inputs and ITC
Total Inward Supplies – ₹1,000,000 (bifurcated as below):
Wheat (Exempt): ₹200,000
ITC: Not applicable for exempt supply.
Cotton (Processed - Not required in manufacturing): ₹300,000
ITC: ₹15,000
Cotton (Unprocessed - Used in manufacturing): ₹500,000
ITC: ₹25,000

Step 2: Outward Supplies (Sales)
Total Outward Supplies – ₹1,175,000 (bifurcated as below):
Wheat (Exempt): ₹250,000
Exempt supply, no ITC to be claimed for this.
Cotton Processed (Not required in manufacturing): ₹350,000
Output Tax: ₹17,500 (Taxable supply)
Processed Cotton & Oil (Taxable): ₹525,000
Output Tax: ₹20,000 (Taxable supply)
By-product Cattle Feed (Exempt): ₹50,000
Exempt supply, no ITC to be claimed for this.

Step 3: Exempt Turnover Calculation for ITC Reversal
Exempt Turnover (based on outward supplies):
Exempt Supplies: ₹250,000 (Wheat) + ₹50,000 (Cattle Feed) = ₹300,000
Taxable Supplies: ₹350,000 (Processed Cotton) + ₹525,000 (Processed Cotton & Oil) = ₹875,000
Total Turnover: ₹300,000 (Exempt) + ₹875,000 (Taxable) = ₹1,175,000
Exempt Turnover Ratio:
Exempt Turnover Ratio
=
Exempt Turnover/Total Turnover
=
300000 / 1175000 = 0.2553
 
≈ 25.53 %


Step 4: Reversal of ITC on Common Inputs (Cotton Unprocessed)
ITC on Cotton (Unprocessed): ₹25,000 (common input, used for both taxable and exempt supplies).
ITC to be Reversed (as per Rule 42):

ITC to be Reversed=ITC on Common Inputs × Exempt Turnover Ratio
=25,000×0.2553 = ₹6,383(rounded to ₹6,383)

Step 5: Final ITC Available for Claim
ITC exclusively for taxable supplies (Cotton processed – not used in manufacturing): ₹15,000

Available ITC on Common Inputs:
Available ITC on Common Inputs
=25,000−6,383=₹18,617

Total ITC Available=₹15,000+₹18,617=₹33,617

Summary of ITC Reversal:
Total ITC Claimed: ₹40,000 (₹15,000 + ₹25,000)
ITC Reversed: ₹6,383
Net ITC Available: ₹33,617

Please share your views with explanation.

Hello everyone,

Mr. A is contractor having annual turnover of 15 lacs and other income as below
Interest on loan given to friends and relatives - 6 lacs
Interest from partnership firm on capital - 2 lakh

My query ?
Is he liable to register under GST ? whether 6 lacs & 2 lacs would be covered in determining threshold limit of 20 lacs for registration under GST ?

I used to stay with my father last year and paid him 20K as rent every month.Also had rent agreement. I used to claim HRA earlier but this year I have not claim HRA deduction. Also I moved to USA in January 2024 but kept paying him some money for maintenance.
I filed his ITR and showed the amount that I paid him when I was with him as rent and the rest 3 months I considered it as gift and didn't include it in his income. Is this correct or should I rectify his ITR and don't show this money as rent and consider all the money as gift? This ITR has been processed already.

If I rent my Indian property to NRI for 3 months and he pays using wise, Is it considered foreign source income?

sir;

Does foreign assets include NRE & FCNR deposits maintained in India ? These details are required to be disclosed in schedule FA ( foreign assets) in case of resident assessee?

please reply. Thanks in advance.

IF I FILED INCOME TAX RETURN FOR A.Y 2024-25 UNDER NEW TAX REGIME ON 10TH JULY,2024 AND THEREAFTER FILED FORM 10-IEA ON 31ST JULY,2024 AND DEPARTMENT PROCCESSED AND RAISED THE DEMAND UNDER OLD TAX REGIME FOR THE SAME AND NOT REVISED TILL DATE THEN WHAT TO DO IN THAT CASE?

Client-A is a Resident Peerson (individual)
Client-B is an NRI (individual)
Client-A wants to receive amount Rs.50 crores from Client-B. Client-B is aiso ready to give amount to Client-A. But there is no relationship. They are only Friends. In this siituation Please give proper advise to the below Questions

1) Whether Client-A can accept that amount without any limit?. If yes, In what Currency either in indian currency or in foreign currency

2)Is there any Procedural Requirements? Plese give the complete Procedure ( RBI permissions, Any FORMs Filing, etc)

3) Tax ipmplications regarding this matter

4) If there is any additional Suggestions , Please Suggest me

Respected Colleagues,
One of my known NRI , now UK citizen having property in india earned rental and filing ITR under income from house property under NRI Status,
Now my first ques is, if same person sold residential property and then reinvest in residential property as per sec 54 of IT act is eligible to claim benefit of sec 54 to exempt capital gains?
Second ques is, if same person without reinvest in property repatriate funds to foreign after payment capital gain tax, then how much % of tax on cap gains with surcharge & HEC?
Third ques is, if person earned income from rental and gains from property sale in india (Already disclose in Indian ITR), then Is he also liable to add income in UK ITR to compute taxes and treat his income from india as per treaty between the countries?

Regards

A Trader who is dealing in cooking masala powder paying tax under compounding system and paying1%. During 2020-21 his turnover exceeeded the basic limit of Rs. 1.50 crore to Rs. 1.53 crore. Enforcement wing officials visited the place of business and collected 5% GST on the excess turnover of Rs. 3 lakhs. But now the assessing officer issued notice in DRC01A proposing to levy tax at 18% GST on the entire turnover of Rs. 1.53 crore. Can the experts throw some light how to respond to this Notice.....

Since which date Late fee u/s 234E for late filing of etds returns is applicable ?
Is there any circular to that effect ?