ITC in case of mixed supply, Goods and Services Tax - GST

[husen kadwalwala]

Dear sir,

we are in process of manufacturing corn flakes and cattle feed.

1. corn flakes @ 5% GST

2. cattle feed is nil rated

for packing material we follow process where we take complete credit for packing a material used in corn flakes packing.

we dont take any credit for nil rated supplies.

is this the right approach ?

Posts / Replies

[Ganeshan Kalyani]

Yes , it is correct.

Apart from this credit there may be other credit like consultancy service, audit fees etc. where you can take credit to the extent of corn flakes supply. The turnover ratio can be taken to arrive at the proportionate credit eligible.

[KASTURI SETHI]

Proportionate ITC has to be taken as per formula under Rule 42 of CGST Rules.

[Shilpi Jain]

If you can identify the packing material expenses for both separately, you can take full credit of the packing material for corn flakes. and reverse full ITC relating to feed.