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Rule 42 reversal under exempt supply

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Vaibhav

Article

70 Points Posted on 21 March 2022

Hello sir,

what's if excess ITC reverse under rule 42.

client hase recived part OC and at the time of part OC client reverse ItC in 3b and at the time of full OC ITC reverse calculate and same is less than previously reverse now what treatment in GSTR 9?

Replies (2)

Quick Summary

This discussion addresses the complexities of reversing Input Tax Credit (ITC) under Rule 42, particularly when a client receives a partial Occupancy Certificate (OC) and later a full OC. It explores scenarios where ITC was initially taken and then reversed, and whether it can be reclaimed. The focus is on the treatment of such reversals, especially concerning exempted supplies, export purchases, or supplies to SEZ units, and how these impact GSTR 9 filings.

CA Altamush Zafar

GST Consultant

10402 Points Posted on 21 March 2022

If ITC was initially taken and then in later month reversed in this case ITC can be reclaimed.
But if reversed in the same month then there are issues