Reversal of ITC in case of Nil Rated Supply of Goods, Goods and Services Tax - GST

[SolarworldEnergySolutions PrivateLimited]

Dear Experts,

We have imported Oats Grains from outside India and Sold the same domestically apart from some other taxable supplies. Since the said items falls under HSN 1004 in Schedule I (List of Nil Rated Goods), we have not charged GST on sale and accordingly declared as Nil rated supply in GST return. Is there any reversal of ITC required in such scenario? Please given reference if yes/no.

Thank you

Posts / Replies

[RaamSrinivasan Kalpathi]

Yes ITC reversal is mandatory not only on the directly related supplies but on the proportionate common inputs like rent, consultancy, audit fees, stationery relating to the said period.  Thanks

[KALLESHAMURTHY MURTHY]

Dear Sir,

I concur with Sri Sri Kalpathi Sir. Exempted supplies along with Taxable supplies required to reverse ITC proportionately as provided under Rule 42 of the GST Law.

[KASTURI SETHI]

Yes, reversal is required as per Section 17 (1) & (2) of CGST Act, 2017.