Input goods and services used for taxable and exempted goods and services :
Illustration : A manufacturer procures input goods and services within State – Rs 1,000. SGST and CGST rate on receipts is 10% each. He manufactured two products out of inputs. One product of value of Rs 800 was subject to SGST and CGST @ 10% each. Other product of value of Rs 800 was exempt from SGST and CGST.
Details SGST CGST
Tax payable on supply of goods and services of Rs 800 96 96
Input tax credit of taxes paid on input goods and services of Rs 1,000 available in Electronic Credit Ledger 50 50
[only 50% input tax credit available]
Net tax payable by cash by the dealer in Electronic Cash Ledger 46 46
Unutilisable input tax credit 50 50
Since 50% of supply of goods and services are exempt, assessee can avail only 50% of input tax credit.
The unutilisable input tax credit is required to be reversed in Electronic Credit Ledger, as it pertains to exempted goods.