ITC in case of Taxable as well Non taxable business

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This query is : Resolved

Quick Summary

A logistics company operating under RCM provisions is considering expanding into trading gloves and masks. They want to know if they can collect GST on this new venture and claim Input Tax Credit (ITC) on related purchases, ensuring it's not treated as common credit. Experts confirm that full ITC can be claimed on inward supplies related to the taxable trading business, referencing Rule 42 for guidance.

Priyanka

Priyanka (Querist)
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25 June 2020 Dear Experts
Entity is operating into logistic services and thereby RCM provisions are applicable. It is not taking ITC benefit and also Common credit is taken into proportionate basis in case of any related sale of taxable service.
Now Company wants to add a business activity and enter into Trading of Gloves and Masks. It is being a completely diverse business from existing one, is it allowed to collect GST from customer for trading business and can take benifit of ITC on purchase of gloves and mask ? can we establish one to one co-relation of input output services here ? it shall not be consider as common credit for company. please give your openion