Input tax reversal

CA Ksheerabthi Nathan (CA in practise) (167 Points)

04 June 2015  

My client purchases gingelly oil seeds and avails input tax credit on it. The goods manufactured from it are gingelly oil and oil cake. Oil  is taxed but oil csake is exempt. My doubt is  whether input tax to be reversed? As oil cake is only a by-product ,should ITC be reversed or not?