Will itc of gst will proportionately allowed as per our sale

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This query is : Resolved

amjad (Querist)

24 May 2018 Dear Professionals, I got a notice from GST department that my taxable sale is very less in compare to Exempted Sales (Exempted Sales - 95% and Taxable Sales - 5%) .
Department mentioned in that you can claim ITC only 5% of Total ITC as my taxable Sales is just 5%.
While my ITC was related to Assets purchased, packing material purchased etc.
Is there any law regarding it?
If it is than how may I utilize my full ITC which I've paid on purchasing assets, packing material and expenditures?

CMA Bhavya

CMA Bhavya (Expert)

24 May 2018 Dear Amjadji,
As per CGST ACT Sec.17(2)--Restrictions for Input Tax Credit: Where the goods or services or both are used by the registered person partly for
effecting taxable supplies including zero-rated supplies under this Act or under the Integrated
Goods and Services Tax Act and partly for effecting exempt supplies under the said Acts, the
amount of credit shall be restricted to so much of the input tax as is attributable to the said
taxable supplies including zero-rated supplies
you may refer Link:https://www.cbic.gov.in/resources//htdocs-cbec/gst/cgst-act.pdf (Page No.20)

Thanks & regards,
Bhavya.P

amjad

amjad (Querist)

27 May 2018 Thank you very much ma'm.

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