Adwatt Pvt. Ltd. is a manufacturing company registered under GST in the State of Uttar Pradesh. It manufactures two taxable products 'Delta' and…

(i) Amount of ITC to be credited to Electronic Credit Ledger, for the month of October S. No. Particulars ITC (₹) Machinery ‘P’ - ‘A’ [Note 1] 36,000 Machinery ‘Q’ [Note 2] 18,000 Machinery ‘R’ [Note 3] - Machinery ‘S’ [Note 4] - Machinery ‘T’ [Note 5] - Raw Material used for manufacturing ‘Delta’ [Note 6] 27,000 Raw Material used for manufacturing ‘Omega’ [Note 6] - Raw Material used for manufacturing ‘Theta’ [Note 6] 18,000 Amount of ITC credited to Electronic Credit Ledger, for the month of October 99,000 (ii) Aggregate value of common credit (Tc) – Note 7 Value of ‘A’ for Machinery ‘P’ purchased on 1st October 36,000 Value of ‘A’ for Machinery ‘T’ purchased on 1st October 2 years ago for effecting both taxable and exempt supplies 54,000 Input tax claimed on Machinery ‘S’ purchased on 1st October 4 years ago for effecting taxable supplies but used for effecting both taxable and exempt supplies from 1st October in the current year [Note 8] 72,000 Aggregate value of common credit (Tc) 1,62,000 (iii) Common credit attributable to exempt supplies, for the month of October Common credit for the month of October (Tm) [Note 9] 2,700 (iv) Computation of GST liability of the company for October payable through Electronic Cash Ledger Common credit attributable to exempt supplies, for the month of October (Te) – Note 10 1,080 IGST payable on ‘Delta' [₹ 9,00,000 x 18%] 1,62,000 IGST payable on 'Omega' [Exempt] Nil IGST payable on ‘Theta' [₹ 6,00,000 x 18%] 1,08,000 Total IGST payable on outward supply 2,70,000 Common credit attributable to exempt supplies for the month of October [Note 11] 1,080 Total output tax liability of October 2,71,080 Less: ITC available in the Electronic Credit Ledger 99,000 IGST payable from Electronic Cash Ledger 1,72,080 Notes: (1) ITC in respect of capital goods used commonly for effecting taxable supplies and exempt supplies denoted as 'A' shall be credited to the electronic credit ledger. (2) ITC in respect of capital goods used or intended to be used exclusively for effecting supplies other than exempted supplies but including zero rated supplies shall be credited to the electronic credit ledger. (3) ITC in respect of capital goods used or intended to be used exclusively for effecting exempt supplies shall not be credited to electronic credit ledger. (4) Machinery 'S' is being used for effecting both taxable and exempt supplies from 1st October. Prior to that it was exclusively used for effecting taxable supplies. Therefore, ITC in respect of such machinery would have already been credited to the electronic credit ledger. (5) Machinery 'T' is being used for effecting both taxable and exempt supplies from 1st October two years ago. Therefore, ITC in respect of such machinery would have already been credited to the electronic credit ledger. (6) ITC in respect of inputs used for effecting taxable supplies will be credited in Electronic Credit Ledger. ITC in respect of inputs used for effecting exempt supplies will not be credited in the electronic credit ledger. (7) The aggregate of the amounts of ‘A’ credited to the electronic credit ledger in respect of common capital goods whose useful life remains during the tax period, to be denoted as ‘Tc’, shall be the common credit in respect of such capital goods. (8) Where any capital goods which were used exclusively for effecting taxable supplies are subsequently also used for effecting exempt supplies, the ITC claimed in respect of such capital goods shall be added to arrive at the aggregate value of common credit ‘Tc’. (9) ITC attributable to a month on common capital goods during their useful life (Tm) shall be computed as under: = Tc ÷ 60 = 1,62,000 ÷ 60 = 2,700 The useful life of any capital goods shall be considered as five years from the date of invoice and the said formula shall be applicable during the useful life of the said capital goods (10) The amount of common credit attributable towards exempted supplies, be denoted as ‘Te’, and shall be calculated as: Te= (E÷ F) x Tr where, ‘E’ is the aggregate value of exempt supplies, made, during the tax period, and ‘F’ is the total turnover in the State of the registered person during the tax period. =Tr х Turnover of exempt supplies during the month of October Total turnover of XYZ Pvt. Ltd. during the month of October = 2,700 х 6,00,000 / 25,00,000 = 1,080 (11) Common credit attributable to the exempt supplies (Te) along with the applicable interest (which is to be ignored in this case) shall, during every tax period of the useful life of the concerned capital goods, be added to the output tax liability of the person making such claim of credit.