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"If no turnover during the tax period /values not available , values for last period may be used " for calculation of D1. How is it practically possible to calculate D1 when no exempt sale has taken and also why do we need to apportion when there is no exempt supplies


Swathi Krishna

Swathi Krishna

CA Inter

7K+

11-Jun-20 00:42

19

Answers (4)

Let's take simple example to understand this. Let's say I have a factory which I use to manufacturer both Taxable and Exempt Goods. I pay rent for the factory premise along with GST. Question is can I take ITC of entire GST paid on Rent. Answer is you need to divide according to your Taxable and Exempt sale. Let's see following situation. 1. Taxable Sale - 400 Exempt Sale - 600 (40% of ITC is available). 2. Taxable Sale - 1000 Exempt sale - 0 (100% of ITC available) 3. Taxable Sale - 0 Exempt Sale - 1000 (0% i.e., No ITC is available) 4. Now comes the question what if there is NO SALE (Turnover) IN THE CURRENT MONTH at all. In that case you take last month's Sale detail to divide the ITC. Please note Situation 2 and 4 are different from each other.


Anwesh Shetty

Anwesh Shetty

Faculty

11-Jun-20 06:31

Because D1 is ineligible credit which we transferred to credit ledger earlier i.e C1, so we have to reverse it for a period of 60 months. In case there are no exempt supplies take last year as basis for proportion.


KEERTHI PRIYA

KEERTHI PRIYA

Moderator

11-Jun-20 14:38

Itâ??s because we used the inputs and input services towards exempt supplies but we do not have exempt turnover for that particular month then we take figures for previous month


Shiva Teja

Shiva Teja

Faculty

01-Jul-20 13:21

Thax sir


Swathi Krishna

Swathi Krishna

CA Inter

7K+

02-Jul-20 19:10

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