ITC in case outward supply is not under gst

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A B Kundu (Querist)
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12 June 2018 Whether ITC would be refunded if the supplier supplies electricity which doesn't come under the ambit of gst law or it should be the part of the cost of production of electricity?

CA Padmasri Manyam

CA Padmasri Manyam (Expert)
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13 June 2018 Electrical energy is covered under GST. However, the same is exempted supply (nil rate).
As per Section 17(2) of CGST Act, any input or input services or capital goods used for exempted outward supply, the input tax credit on the same is not allowed.

Therefore, if you are engaged in supply of only exempted goods or services, full input tax credit is not allowed. In such cases, GST input tax credit would form part of your cost of production. (No refund of input tax credit is allowed)

In case you are engaged in supply of both exempted and taxable, then proportionate credit to the extent of taxable outward supply is allowed.

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A B Kundu

A B Kundu (Querist)
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13 June 2018 Thank you so much.......

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