There is an exception in Rule 86B on utilisation of ITC, which states as follows:-
If the persons mentioned below have paid more than Rs.1 lakh as Income Tax under Income Tax Act, 1961 in each of the last two financial years for which the time limit to file the income tax return under Section 139(1) of the said Act has expired:
- The registered person
- Proprietor, karta or Managing Director of the registered person
In my situation, the GST registered entity is a Private Limited Company, and the CEO, who is also a director on the board, pays more than ₹1 lakh in income tax per annum. In this case, am I required to pay 1% of GST via bank transfer, or can I take advantage of the exemption? I have received a notice from the department; how should I respond to it?
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