Rule 42 of cgst act 2017

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This discussion addresses a retailer's query about a notice received from the department demanding the reversal of Input Tax Credit (ITC) despite dealing in exempted supplies. The consensus is that if no ITC was claimed on exempted purchases or sales, no reversal is necessary. However, if ITC was claimed on taxable supplies that were subsequently sold, a clear reply stating this fact should be provided to the department.

Pawan Gupta

Pawan Gupta (Querist)
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24 November 2023 I am a retailer and deals in sale of exempted supply for which i made exempted purchase but i received notice from department asking to reverse itc what to do how to give them reply is there any format to reply if any one have please provide me the format

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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24 November 2023 No format reply you are dealing exempt purchase and sale and not availed any ITC hence no need for any reversal of ITC.
Check whether any ITC claimed before reply.

Pawan Gupta

Pawan Gupta (Querist)
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25 November 2023 I have claimed itc of taxable supplies for which i have shown sale too

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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25 November 2023 Reply I have claimed itc of taxable supplies for which i have shown sale too no need for any reversal.
I have not claimed ITC on exempt sale.

Pawan Gupta

Pawan Gupta (Querist)
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25 November 2023 thank you for your reply sir

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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25 November 2023 You are welcome...
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