1. Tax payer dealing in pesticides (taxable) and also Agricultural seeds (exempted). Maintaining separate purchase and sale ledgers.
2. Filing GSTR-3B return reporting sale turnovers of pesticides and agricultural seeds and adjusting ITC accrued on purchase of Pesticides against output tax payable on sale of pesticides.
3. In this scenario, whether ITC restriction arises or not?
8 Replies
Shivam RC
(Student)
(23683 Points)
Replied 14 November 2020
Yes you can claim ITC but incase of Capital Goods which are being used both for supplying Taxable Goods ( Pesticides ) as well as Exempted Goods ( Agricultural Seeds ), you have to reverse proportionate ITC and follow the Provisions of Section 17 and 18 of the CGST Act 2017.
venkateswara reddy gudemupati
(33 Points)
Replied 14 November 2020
He is a trader,i.e purchase and sale only. No involvement of capital goods.
JATINDER KUMAR
(Accountant)
(3662 Points)
Replied 14 November 2020
You can not claim full ITC if you use common services for trading of goods
For example if ITC availed by you on following services
Rent
Telephone expenses
Advertisement expenses
Professional and Legal Fees
etc.
For example if ITC availed by you on following services
Rent
Telephone expenses
Advertisement expenses
Professional and Legal Fees
etc.
Ranga raj
(still studying)
(122 Points)
Replied 14 November 2020
Sir, The ITC relating to the expenses incurred for the sale of pesticides can be claimed but common expenditures incurred for both exempt sales and taxable sales like purchase of stationary, audit fee should be claimed proportionately on turnover basis. For detailed clarification read rule 42 & 43 of CGST Act and reversal of common credit.
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