ANSWER
Facts of the case: Reversal of common credit in flat after completion
certificate during 2017-18.
Law Applicable:
RULE 42. Manner of
determination of input tax credit in respect of inputs or input services and
reversal thereof
(1) The input tax credit in respect of inputs or input services, which attract
the provisions of sub-section (1) or sub-section (2) of section 17, being partly
used for the purposes of business and partly for other purposes, or partly used
for effecting taxable supplies including zero rated supplies and partly for
effecting exempt supplies, shall be attributed to the purposes of business or
for effecting taxable supplies in the following manner, namely,-
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RULE 43. Manner of
determination of input tax credit in respect of capital goods and reversal
thereof in certain cases
(1) Subject to the provisions of sub-section (3) of section 16, the
input tax credit in respect of capital goods, which attract the provisions of
sub-sections (1) and (2) of section 17, being partly used for the purposes of
business and partly for other purposes, or partly used for effecting taxable
supplies including zero rated supplies and partly for effecting exempt supplies,
shall be attributed to the purposes of business or for effecting taxable
supplies in the following manner, namely,-
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Reply: For reversal of common credit, the formula/procedure is prescribed
in Rule 42 and Rule43.These are for reversal of ITC on inputs/input services and
capital goods respectively. Relevant clarifications are inserted in the said
rules for construction services vide Notification No. 16/2019 Central Tax dt.
29.03.2019 wef 01.04.2019.
Although these amendments are
effective from the date of issue of notification,and has no retrospective
effect. But in absence of any such clarifications, before 01.04.2019 these can
be considered as guidance notes for reversal of common credit for the earlier
period also. (Reply dt. 02/08/2021)