TMI BlogRule 42 - Manner of determination of ITC in respect of input & input services and reversal thereofX X X X Extracts X X X X X X X X Extracts X X X X ..... s and input services in a tax period (T1) Inputs and input services intended to be used exclusively for the purposes other than business (T2) Inputs and input services intended to be used exclusively for effecting exempt supplies (T3) Inputs and input services on which credit is not available under sub-section (5) of section 17 (C1) Input tax credit credited to the electronic credit ledger [C1= T- (T1+T2+T3)] Step 2 - After calculating Input tax credit credited to the electronic credit ledger Credit - C1 , Calculate common credit, be denoted as C2 and calculated as- After calculating C1 , Calculate common credit, be denoted as C2 and calculated as- (T4) Input tax credit attributable to inputs and input services intended to be used exclusively for effecting taxable supplies including zero rated supplies (C2) Common credit available for apportionment C2 = [C1 - T4] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revious to the month during which the said value of E/F is to be calculated. Note (a) The aggregate value of exempt supplies and the total turnover shall exclude the amount of any duty or tax levied under entry 84 and entry 92A of List I of the Seventh Schedule to the Constitution , and under entry 51 and 54 of List II of the Seventh Schedule to the Constitution . Notes: - Entry 84: - Duties of excise on all excisable goods manufactured or product in India Entry 92A: - Tax on inter-state sale (CST) Entry 51: - State Excise duty on liquor, opium etc. Entry 54: - Taxes on the sale or purchase of goods other than state supply Step 4: - D2 - Determine the amount of ITC attributable to non - business purpose by following for a tax period D2 = 5% of C2 Step 5: - After calculating C2 , the remainder of the common credit shall be the eligible input tax credit attributed to the purposes of business and for effecting supplies other than exempted supplies but including zero rated supplies and shall be denoted as C3 , where C3 = C2 - (D1+D2) Step 6: - Reverse the ITC = (D1 + D2) The amount C3 D1&# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commercial project irrespective of the date of commencement and are going on 1 April 2019, or Residential ongoing project as on 1 April 2019, which did not undergo or did not require transition of input tax credit consequent to change of rate of tax on 1 April 2019, i.e., ongoing project who are paying tax @ 8% or 12% with ITC. Period for which Final computation would be made From the commencement of the project or 1 July 2017, whichever is later To the completion or first occupation of the project, whichever is earlier Due date of final computation would be made Before the due date for furnishing of the return for the month of September following the end of financial year in which the completion certificate is issued or first occupation take place of the project, The said person shall be liable to pay interest on the said excess amount at the rate specified in section 50(1) for the period starting from the first day of April of the succeeding financial year till the date of payment. Manner of final computation Step 1: - C1 = T- (T1+T2+T3) [same as Rule 42 (1) (2)] Step 2: - C2 = C1- T4 [same as Rule 42 (1) (2)] Step 3: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03.2019] Sub Rule 4: - In case of supply of services covered by clause (b) of paragraph 5 of Schedule II of the Act, the input tax determined under rule 42(1) shall be calculated finally, for commercial portion in each project, other than residential real estate project (RREP) These provisions are applicable For commercial portion in each project shall be determine the final credit. Period for which Final computation would be made From the commencement of the project or 1 July 2017, whichever is later To the completion or first occupation of the project, whichever is earlier Due date of final computation would be made Before the due date for furnishing of the return for the month of September following the end of financial year in which the completion certificate is issued or first occupation take place of the project, The said person shall be liable to pay interest on the said excess amount at the rate specified in section 50(1) for the period starting from the first day of April of the succeeding financial year till the date of payment. Manner of final computation Step 1: - C1 = T- (T1+T2+T3) [same as Rule 42 (1) (2)] ..... X X X X Extracts X X X X X X X X Extracts X X X X
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