ITC reversal on inputs/input services (Rule 42)

According to Section 16(1) of the CGST Act, 2017, when goods and/or services are used for both non-business and business purposes, the registered person can only claim the ITC attributable to business purposes. Thus, such transactions involving both business and non-business purposes will necessitate the registered person to divide the credit into eligible and non-eligible … Read more

ITC reversal on Capital Goods (Rule 43) 

Like input and input services, businesses acquire capital goods in the ordinary course of business that is intended to be used for business or personal purposes OR is taxable or exempt. Credit for capital goods related to the business and its activities is permitted based on the useful life of that particular capital good, with … Read more

GST ITC Reconciliation: A Walk Through!

What is GST ITC Reconciliation? The fundamental pillar of the GST regime is thought to be an input tax credit. Indeed, it is the provisions of ITC that essentially make GST a value-added tax, i.e., collecting tax at all points of the supply chain while allowing credit for previously paid tax. ITC is a tool … Read more