We are a Petrol Pump, selling Petrol, Diesel, and Lubricants. Petrol and Diesel do not come under GST whereas Lubricants comes under GST. We are claiming all types of ITC (although unutilized) since July-2017. A very small part of this accumulated ITC has been utilized in 4 invoices of a service rendered by us (1 invoice in 2017-18 and 3 invoices in 2018-19), rest all amount is still there in Credit Ledger. Someone has recently suggested that we can not claim ITC as we are a Petrol Pump and have to pay the tax plus interest of all those 4 invoices where a part of this ITC had been adjusted. Can someone help me with the detailed procedure to sort-out all this?
Hello,
ITC of inputs, input services and capital goods used specifically for selling lubricants will be available and can be utilized against the output tax liability of lubricants.
While ITC inputs, input services, and capital goods used for both Non-GST and GST supplies will be available proportionately.
So you need to reverse only the proportionate credit with interest.
I hope that this answer satisfies your requirement.
Regards,
CA Hunny Badlani
Dear Sir,
Hope you are doing well !
Kindly contact us personally.
We may help you in entire procedure.
Since petrol and diesel are not coming under GST and you are selling all three things you must claim only ITC of those goods which are specifically used for lubricant and if some goods are common between lubricant and petrol you need to reverse ITC based on turnover.
It would be a long calculation it would be better if you can hire a CA and right now just reverse the ITC and wait for interest notice and then pay interest.
Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.
Thank you.
- As your outward supply i.e. sales consists of Non-GST and taxable supplies, you can claim the ITC proportionately to taxable value of supplies.
Hi
ITC should have been reversed under rule 42 and 43 of the CGST rules. However, if the same has not been done, do the same with GSTR 9 filing.
ITC wrongly utilized (if such ITC was not relatable to outward taxable supply), shall have to be reversed and payment to be made with interest.
We may further discuss the issue in detail.
