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GST credit Reversal

Meet Shah (ACA) (178 Points)

01 December 2017

one of my client deals in real estate sector He received B U on 18/09/2017 During months of Oct 2017 he received Rs.50k as flat booking no GST will be levied on the same
but now what will be the impact on GST / Service Tax Credit Taken on the same while constructing entire Build
should i have to reverse the credit ?

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5 Replies

Rakesh Sarswath (Article Student-GST Specialization) (190 Points)
Replied 01 December 2017

Dear Meet Shah,

We just require reversing the credit belonging to such building however if we have any common credit then we need to reverse the same proportionately as per ITC rules.

Further, the department can ask us to pay the interest on the ITC utilized towards any other supplies but such issues can be fought against the department.

Meet Shah (ACA) (178 Points)
Replied 01 December 2017

okay then should i have to consider credit Taken since the starting of building or only during the month in which i have supplied the exampted goods?? the word "In a tax period" is mentioned in rule 42

Rakesh Sarswath (Article Student-GST Specialization) (190 Points)
Replied 01 December 2017

Not only for the tax period but I feel all the input tax credits belonging to such project need to be reversed. Even in earlier service tax regime, there were litigations in this regard but finally, same was settled by judicial pronouncements by saying this is the basic understanding of free flow of credit.