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ITC for mixed supply

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CA NAMRATA KAYARWAR

186 Points Posted on 20 September 2022

In case of rice mill they have ITC on consumables, Services, fixed assets and purchases also.

my questions are:

1. Whether the credit reversal under rule 42 and 43 apply and need to be done on monthly basis??

2. In case where only exempted supply is there in a month and during such month ITC of consumable was there which was used for both taxable as well as exempt supplies however during the month taxable supplies was nil. then how to take credit of the same.

3. In a month sale was completely nil neither exempted nor taxable supplies made during the month but common credit was there. in that case how to claim such ITC.

4. In case of services like repair maintenance services, bank charges how to compute elegilbe ITC and amt of ITC reversal.

please clarify and thanks in advance.🙏

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Quick Summary

This discussion delves into the complexities of Input Tax Credit (ITC) for businesses dealing with mixed supplies, specifically a rice mill. It addresses crucial questions regarding monthly ITC reversals under rules 42 and 43, especially when only exempted supplies are made. The queries also cover how to claim ITC on consumables used for both taxable and exempt supplies when taxable sales are nil in a given month, and how to manage common ITC when there are no sales at all. Finally, it seeks clarification on computing eligible ITC and reversals for services like repair and maintenance, and bank charges.