ITC Input Claim Rules

Dear Sir,

We are proprietary concern and we are providing security services to our client on RCM basis as well as manpower services on forward charge basis... My query can we claim and utilise the  ITC Input received on expenses incurred by our business?

Replies (6)
Quick Summary
This discussion clarifies the rules for claiming Input Tax Credit (ITC) on expenses for businesses providing security services. It explains that ITC can be claimed on a proportionate basis, depending on the value of taxable versus exempt supplies. Specifically, if a business supplies both RCM (Reverse Charge Mechanism) and forward charge services, ITC is only eligible for the portion related to taxable (forward charge) supplies.

You will have to take proportionate itc
Yes, you can claim the ITC, but only on proportionate basis according to the value of your exempt and taxable supplies.

For example if my monthly business turnover includes 80% RCM services.... and 20% Forward charge... So if i have recieved itc of 100% in month. I would be only eligible to to utilise 20% of itc? and rest 80% of itc i have to reversed?...

Is there any circular for this?... If yes please provide a link

There are rules for this. Refer rules 42 & 43

Yes ITC will be available in proportion to supply made under FC .
Can refer Section 17(2)(3) r/w rule 42

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