If a company sold duty credit scrips which is exempt, is it liable to reverse itc for the same? If Exempted & not required to calculate Reverse charge kindly share Notifications & circular.
In my view and understanding, as per Section 17(2) of GST Act, Input credit has to be reversed proportionately, where the goods or services or both are used for effecting taxable supplies including zero-rated supplies and exempt supplies, based on the above revenue proportionate.
How ever, there are no any specific inward supply of goods or services or both for duty credit scrips, hence, only Common Input Credit shall be reversed proportionately.
There are some case laws, which are available in Internet, may refer for better out come. Else if volume is high, better to file application against your State AAR.
NO ITC Reversal is required because MEIS scrip is just a government incentive for your export
There is no such notification/ circular available from the department.
But you can go through many articles over the internet for your better understanding
Because MEIS scrip is only a government incentive for your export, NO ITC Reversal is necessary.
How to clarify please suggest?As per Explanation1 to Rule 43 value of exempt supplies shall not include value of Supply of Duty Credit Scrips, therefore, no ITC reversal is required on account of this under Rule 42 and Rule 43
[ 13 [ Explanation 1]:-For the purposes of rule 42 and this rule, it is hereby clarified that the aggregate value of exempt supplies shall exclude: -
(b) the value of services by way of accepting deposits, extending loans or advances in so far as the consideration is represented by way of interest or discount, except in case of a banking company or a financial institution including a non-banking financial company, engaged in supplying services by way of accepting deposits, extending loans or advances; and
(c) the value of supply of services by way of transportation of goods by a vessel from the customs station of clearance in India to a place outside India.]
15 [(d) the value of supply of Duty Credit Scrips specified in the notification of the Government of India, Ministry of Finance, Department of Revenue 35/2017-CGST (rates) dated the 13th October, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number GSR 1284(E), dated the 13th October, 2017.]
15. Inserted vide NN- 14/2022-CEdated. 05.07.2022