MEIS Duty Credit Scrip

This discussion explores whether input tax credit (ITC) needs to be reversed for sales of MEIS Duty Credit Scrip, which are considered exempted sales. Initially, the thought was no reversal was needed as the scrip was a reward. However, it was clarified that under Rule 42 of the CGST Act, common ITC must be reversed proportionally against exempted income. The conversation then moves to how to calculate this specific reversal amount.