Can itc reversal under rule 42 be done half yearly instead of monthly.
My auditee company is following practice of taking itc half yearly and also reversing itc half yearly which in my opinion is incorrect.
But it's accounts team says that there is no specific restriction in gst act to reverse itc under rule 42 half yearly
Rule 42(1) says exempt supply shall be determined provisionally for each tax period and Input tax credit shall be reversed specified in sub rule(1) .
( Please refer rule in detail, I have written in short)
So the word Tax period is important here.
And Tax period is defined under section 2(106) - Tax period means the period for which return is required to be finish.
so return under section 39( GSTR3B ) required to be furnished either monthly or quarterly.
So considering above section & rule you have to reverse monthly.
Do more interpretation & take others opinion as well.
Also I would like to add in the above reply rule 42 is applicable only to Input & Input services not for Capital Goods, rule 43 of the CGST rule2017 , applicable to Capital Goods.
Shaswat initial support private limited
Ahmedabad
CS
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