Question ID : 44667

Interest Income and Revesal of Input tax credit

"Explanation 1(b) to Rule 42(5) of CGST Rules 2017 - provides that - for the purposes of rule 42 and this rule, it is hereby clarified that the aggregate value of exempt supplies shall exclude 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." As such Interest Income is to be Excluded for Rule 42 from Value of exempted supply. Does such interest Income is also to be Excluded from Value of Total turnover( in the denominator) , while calculating Common Input tax credit to be reversed.

posted by Prashanth Karanth on Jun 12 2024 12:00AM