24 May 2018
Dear Professionals, I got a notice from GST department that my taxable sale is very less in compare to Exempted Sales (Exempted Sales - 95% and Taxable Sales - 5%) . Department mentioned in that you can claim ITC only 5% of Total ITC as my taxable Sales is just 5%. While my ITC was related to Assets purchased, packing material purchased etc. Is there any law regarding it? If it is than how may I utilize my full ITC which I've paid on purchasing assets, packing material and expenditures?
24 May 2018
Dear Amjadji, As per CGST ACT Sec.17(2)--Restrictions for Input Tax Credit: Where the goods or services or both are used by the registered person partly for effecting taxable supplies including zero-rated supplies under this Act or under the Integrated Goods and Services Tax Act and partly for effecting exempt supplies under the said Acts, the amount of credit shall be restricted to so much of the input tax as is attributable to the said taxable supplies including zero-rated supplies you may refer Link:http://www.cbic.gov.in/resources//htdocs-cbec/gst/cgst-act.pdf (Page No.20)
CAclubindia
