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Set off of liability

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harshit

student

30 Points Posted on 24 May 2020

A person used to deal in supply of shoes and has ITC in credit ledger for same but now such person has started dealing in supply of medicine. Can such ITC ( on account of shoe) be utilised for set off of output of medicine?
Provision/ Section?

Replies (2)

Quick Summary

This discussion clarifies whether Input Tax Credit (ITC) accumulated from dealing in shoes can be used to offset the output tax liability for a new business dealing in medicines. The consensus is that ITC can generally be utilised for any output tax, provided the credit is not blocked and the prescribed procedures for set-off are followed, irrespective of the change in business nature.

Dhiraj Kejriwal

B.Com (H) CA

70 Points Posted on 24 May 2020

Set off of ITC doesn’t depend on the nature of business. As long as the credit is not blocked u can set it off against output tax of medicine. Bt u r advised 2 follow the prescribed manner of set off.