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GSTBusiness
ITC Reversal — Rule 42
Reverses common input tax credit attributable to exempt supplies (D1 = E ÷ F × C2).
Your inputs
₹1,00,000
₹
₹2,00,000
₹
₹10,00,000
₹
Result
- Exempt ratio (E ÷ F)
- 20.00%
- ITC to reverse (D1)
- ₹20,000
- Eligible ITC
- ₹80,000
Reviewed by CA team
Estimates only — rules change frequently. Please verify with a CA before you file, invest, or sign anything.
Assumptions
- Rule 42 of CGST Rules — for inputs/input services used partly for exempt supplies.
- Annual reconciliation under Rule 42(2) may require recomputation.
Eligible vs reversed ITC
How this is calculated
Reviewed by CA teamD1 = (E ÷ F) × C2 C2 = common ITC after excluding T1+T2+T3+T4 from total ITC (T) E = exempt turnover during the tax period F = total turnover during the tax period Eligible ITC = C2 − D1
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