EXAMPLE-145
M/s X, a
service provider has provided services during August month valuing Rs. 6000000.
Out of which exempted supply of services value Rs. 20,00,000 and taxable
services value Rs. 4000000.
GST
paid on common input service of value Rs. 800000 received during month.
Calculate
the total amount payable as GST (Central tax and State tax or Tntegrated tax as
the case may be) and ITC eligible for this month.
GST rate (CGST+ SGST rate or IGST) rate is 18 %.
Common credit
on Input services = Rs. 8 lakh
Output GST
liability = 40lakh *18% = Rs. 7.2 lakh
In accordance
of
Rule 42 (Manner of determination of input tax credit in respect of inputs or
input services and reversal thereof) of Chapter - V of CGST Rules, 2017-
common credit on Input services (C1) shall be credited in
E-credit ledger and calculation of common credit that relates to exempt supply
and non-business purpose i.e. (D1+D2) shall be reversed during the relating tax period.
Thus in view
of above provision credit on common input services of Rs. 8 lakh shall be
credited in E-credit ledger.
Amount
of credit that relates to exempt supply denoted as (D1) = C2*E/F
D1 = 8 lakh *20 lakh/60 lakh = Rs. 2,66,667
·
Thus
credit D1 = Rs. 266667 which is
already credited in e-credited ledger, shall be reversed and added to output tax
liability of registered person in the tax period
of August to which it relates.