Reversal under rule 42

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Assistant Audit Manager
46 Points Posted on 14 February 2020
if a company has a investment in listed equity shares, if that investment is sold and booked capital gain then, same need to be consider for reversal of ITC under rule 42.
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On 14 February 2020 at 10:17 Report
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This discussion clarifies the application of Rule 42 regarding the reversal of Input Tax Credit (ITC) when a company sells listed equity shares and realises a capital gain. It confirms that 1% of the sale value of securities should be treated as exempted turnover. Consequently, common input credit needs to be proportionately reversed, even if directly related input has been expensed.

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banglore
1496 Points Posted on 14 February 2020
Yes 1% of sale value of securities has to be considered as exempted turnover and proportionately common input credit has to be reversed while directly related input is totally expensed.
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On 14 February 2020 at 11:29
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Assistant Audit Manager
46 Points Posted on 14 February 2020
Ok thanks
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On 14 February 2020 at 11:30

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