Home Forum Goods and Services Tax - GST Month 12 2019 2019 (12) This
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Query regarding common ITC reversal - Goods and Services Tax - GSTExtract Sir, in case of sugar mill, assessee has sold sugar, molasses both are taxable supply but assesse has purchase boiler/turbine for generation of power and from this 50% power will be sold to outside and 50% will be captive consumed for manufacturing of sugar. Now, my question is assessee has to reverse ITC on boiler/turbine on proportionate basis, then what will be base. Assume- power sale to outside is ₹ 10 crores which is exempt and sugar/molasses sale is ₹ 150 crores. And ITC related to power plant is ₹ 25 crores. Option-1 Reversal of ITC= (Total exempt sale/Total sale * ITC) = (10/160*25) = ₹ 1.56 crores or Option-2 Reversal of ITC= 50% of ₹ 25 crores = ₹ 12.5 crores because power sale 50 % sold to outside and 50 % use for sugar manufacturing. Kindly clarify which option is true.
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