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As the commercial production of exempted goods did not begin in 2018-19, the entire input tax on input services, subject to the provisions under rule 42(2) of the GST Rules, is an admissible credit during 2018-19.

Input Tax Credit — According to the Applicant, the formula prescribed under rule 43 of the GST Rules is applicable only after the commencement of commercial production. The useful life of the capital goods should, therefore, be calculated from the date of the beginning of the commercial production. In the Applicant’s case, the commercial production of taxable goods started in December 2018. The commercial production of the exempt goods did not begin in 2018-19. Authority ruled out that since the commercial production of exempted goods did not begin in 2018-19, the entire input tax on input services, subject to the provisions under rule 42(2) of the GST Rules, is an admissible credit during 2018-19. — Metro Dairy Ltd., In Re… [2019] 16 TAXLOK.COM 040 (AAR-WB)