reversal of GST ITC on Sale of MEIS/SEIS at nil rate under GST, Goods and Services Tax - GST

[SHAHID HASHMI]

Sir, We are manufacturer and exporter of Wires & Cables. We are selling our products in domestic market as well as also exporting its outside India. We are getting MEIS Script. Now we are selling the MEIS Script in domestic market. Earlier there was IGST 12% /5%. As per recent Notification , Sales of script is come under exempted supply under Chapter heading 4907.

My queries are as follows:

(i) Whether at the time of supply of MEIS as goods covered under 4907 as exempt supply, is it fulfill the provisions of section 17(2) of the act.

(ii) Whether we have to reverse the GST ITC (Credit) for the above supply in spite of we did not take any credit on such script.

(iii) We are exporting product at zero rates and we have got script based on export sales. In my view it is reward not goods and we have not availed any input credit on that script.

(iv) if it is come under supply, what is the formula to be applied for reversing the GST ITC.

If we go through formulla as per Rule 42 our input reversal comes 22% of total credit taken during that month.

Please comment as soon as possible

S. N. HASHMI

9828385160

Posts / Replies

[CASusheel Gupta]

Export and sale of MEIS Scripts are two different supplies.

ITC taken for zero rated supply should be considered as having been used exclusively for effecting zero rated supplies.

However, the common credit needs to be reversed.

Thanks and Regards

CA Susheel Gupta

8510081001, 9811004443