Rule 42 Manner of determination of input tax credit in respect of inputs or input services and reversal The supply made partly for Business and partly other purpose , the ITC has to be reverse the supply attributed to other purpose.
Rule 43 Manner of determination of input tax credit in respect of capital goods and reversal thereof . The capital used in supply of Taxable & non taxable supplies , the ITC claim on capital goods has to be reverse in proportion to Non Taxable Supply
For Eg
capital goods over the useful life of 5 years.
1. Calculate monthly credit - ITC รท 60, say TC
2. Calculate ITC attributable to exempt supply - TC x Exempt Supply รท Total Supply for the month