Question ID :
38090
Reversal of ITC under rule 42 wrt tax paid on reverse charge
A private Limited paid GST under reverse charge wrt import of service from its parent company. The total GST paid on import of service is Rs 1,00,000 and subsequently claimed ITC. As per rule 42, the ITC is to be reversed wrt exempt suppy. As per section 17(3), the GST paid on reverse charge is exempt supply. So, does it mean the entire GST paid of Rs 1,00,00 on this transaction we have to reverse it.
Kindly confirm the same.
Thanx in advance
Posted by
CA Neha Gupta
on
Apr 12, 2019
Filed Under
GST
Yes if the amount is identifiable it has to be reversed in full .
otherwise this formula can be used:
Posted by
CA. BISHT RAKESH on
Apr 13, 2019
Answer ID :
76510
Section 17(3) restriction covers a supply where the GST has been paid by the recipient, and the restriction would be applicable in the hands of the supplier (as exempt supply) and not the recipient. Examples are GTA, Advocates etc. In case of GTA where the recipient has paid GST under RCM, restriction on ITC under Section 17(3) would be applicable on the GTA. In your case, Section 17(3) restriction would not be applicable, provided your outward supplies are fully taxable under GST.
Posted by
Vikram Katariya on
Apr 21, 2019