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ITC on Common Credit

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SATHISHKUMAR

49 Points Posted on 04 April 2022

A Company is engaged in trading of exempted goods and also providing services(Cold Store). The service component includes both taxable and exempted supply.

Now company is having single registration and the company is not availing any input credit at all.

Exempted Sales		Rs.75
Services:
Taxable Service	Rs.15
Exempted Service	Rs.10	Rs.25
Total Turnover		Rs.10

Input credit on common expenses like Bank charges, Audit fees will be allowed in the proportion of Taxable supply to total turnover i.e., 15/100

There are certain input credits on expenses exclusively used for provision of services. My query is:

Whether eligible input credit on Services can be calculated in the proportion of Taxable Service to Total service value i.e., 15/25?
Or this also has to be calculated in the same manner like input credit on common expenses i.e., 15/100?

Replies (3)

Quick Summary

This discussion explores the complexities of Input Tax Credit (ITC) for a company trading exempted goods and providing both taxable and exempted cold store services. The core question revolves around how to apportion common input credits, such as bank charges and audit fees, between taxable and exempted supplies. It also delves into whether input credits exclusively used for services should be calculated based on taxable service value or the overall turnover.