Reversal of ITC rule 42

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nitin gulati (Querist)
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29 November 2019 Sir
In case of Export sales of goods and domestic sales of goods made by dealer.
Whether Rule 42 is applicable for reversal of ITC .
say Export Sales :1 cr
Domestic Sales: 2 Cr
Total ITC = 30 lac (Purchase of Goods)
Reversal of ITC (rule 42)=30*1/3= 10 Lac.
Please provide your opinion.(regarding above)
Thanks in advance.

CA Ankit R Momaya

CA Ankit R Momaya (Expert)
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29 November 2019 Rule 42 is not applicable in cases of Exports since it is a Zero-rated Supply.

No requirement to reverse ITC.

CA Anita Bhadra

CA Anita Bhadra (Expert)
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29 November 2019 Reversal need not to be made in case of export sale
As per Rule 42 of CGST Act - ITC to be used exclusively for making supply other than exempted (but incl. Zero rated)

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