Master in Accounts & high court Advocate
                
                   9434 Points
                   Joined December 2011
                
               
			  
			  
             
            
             Dental services are considered as a composite supply, which means that they consist of both exempt and taxable services. In such cases, the initial exemption has to be computed based on the value of exempt services and taxable services. 
The formula for computing the initial exemption is as follows:
Initial eemption = (value of exempt services/total value of services) X Input tax credit. 
where : Value of exempt services is the value of services that are exempt from GST.
Total value of services is the total value of all services provided by the dental clinic. 
INput tax credit is the credit available on the input taxes paid on the purchase of goods and services used for providing taxable services. 
for example: Let's say a dental clinic provides both exempt and taxable services in a year. The value of exempt services is Rs.5 lakhs, and the value of taxable services is Rs.10 lakhs. The total value of  services is Rs.15 lakhs. The input tax credit available is Rs.1 lakh. 
Using the formula above, we can compute the initial exemption as follows:
Initial exemptiion=(Rs.5 lakhs/Rs.15 lakhs) X Rs.1 lakh = Rs.33,333
Therefore , the initial exemption for the dental clinic would be Rs.33,333.