If the input is used partly for making taxable goods and partly for exempted goods, will input tax credit be available?
Where inputs are partly used for making taxable goods (or inter-State sales) and partly for making exempt goods, the tax credit shall be reduced proportionately. To illustrate, X purchased machinery for Rs. 1 lakh and paid a tax of Rs. 12,500 on it and used it in the manufacture of taxable as well as exempted goods. At that time, he estimated that the share of taxable goods made by the machinery would be 80 per cent. In this case, his input tax credit will be restricted only to 80 per cent of Rs. 12,500 or Rs. 10,000.
Related Questions
- If the input is used partly for making taxable goods and partly for exempted goods, whether input tax credit will be available?
- If the Input is used partly for making taxable goods and partly for exempted goods, will input tax credit will be available?
- If the input is used partly for making taxable goods and partly for exempted goods, will input tax credit be available?
