ASSESSEE IS A PUBLISHER OF NEWSPAPER. HIS PRINTED NEWSPAPER SALE IS EXEMPT BUT ADVERTISEMENTS PUBLISHED ARE TAXABLE UNDER GST. ASSEESEE IS CLAIMING THE ITC OF PAPER ,INK,PLATES ETC. AGAINST OUTPUT TAX OF ADVERTISEMENTS PUBLISHED. CAN HE DO SO?

Reply— 

Where common taxable inputs and/or services are used for making both taxable and non-taxable/ exempt supplies then the quantum of credit on such inputs/input services is restricted to the credit attributable to taxable supplies.  In other words the total credit will be subject to pro-rata reversals i.e. reversal in proportion to value of non-taxable/exempt supplies. (see Rule 42 of the CGST Rules, 2017 for computation of credit in this case).

As your client is engaged in both exempted  as well as taxable supply under GST, he can only avail the proportional amount of ITC attributable to taxable supplies.